Questions regarding a mortgage (loan, foreclosed, credit, second mortgage)

[Fripper]

My sister and BIL own a condo and also a double wide trailer in a resort area on a large lake in Michigan. They have just sold the condo, they were underwater, but have the money to bring to the table to make up the difference. The double wide is also for sale, which is owned free and clear. They are buying a 2nd home, cottage on a lake, their primary residence is out West. They have excellent credit history and are both retired, BIL is currently receiving SS and pension, sister is receiving pension and will receive SS in September. Since they did not make any money on the condo, and will not make their down payment money until they sell their trailer, what would be their best loan options? Could they take out a short term loan for the downpayment? Take out a loan for the full amount, and pay down the loan after the sale of their trailer? Are there other options they should look into?

Thanks for any help.

[jackmichigan]

Of course, the easiest--and perhaps best--thing for them to do would be to sell the trailer before they entered a contract to purchase another house. A bank should be wary about loaning money to people who will have no equity in a property.

If they're sure they can make the payments, however, perhaps they could mortgage the double-wide trailer in an amount sufficient to provide the down payment, plus some additional. Or, if a seller is willing, they could ask them to take back a second mortgage on the cottage they intend to buy. The downside to the seller would be that as holders of a second, subordinate mortgage they would have little security if the first mortgage were to be foreclosed upon.