Q. We've all heard about the housing market and the foreclosures. But can you please tell us -- the common folk -- how we can get our hands on the foreclosure properties that are on the market?
A. Properties about to be foreclosed and sold at public auction are advertised in the local papers. The ads will tell you whom to contact for information. Anyone can bid, but you must be prepared to buy for all cash. Experienced bidders sometimes have a line of credit all set up and waiting.
The first time you try this, it's best to have your own lawyer guide you through the process, which varies from one location to another.
You may be thinking of houses that have already been foreclosed on and are back on the market, often at bargain prices. Those would include VA and FHA foreclosures and properties that have ended up owned by lenders. Most real estate brokers can help you locate these. If you financially qualify, you would buy with a normal purchase contract and either all cash or regular mortgage financing.
I realize now that I've set out the requirements that once again that "them as has, gets." In order to cash in on the foreclosure mess, you have to start out with things like money in the bank, good credit and dependable income. These days, that does let out a lot of common folk.
Q. We live in a house we built four years ago with a 15-year mortgage. We want to sell and move to another state, but this time of year is not opportune for selling our rural home. We want to wait until spring to put it on the market.
In the meantime, we've seen a house that we'd like to put an offer on. We'd be putting about half down (depending on where negotiations end up) and taking a mortgage for the rest.
On our current mortgage, we owe less than half the value of our current home. What options are available for financing? Can we just get another regular mortgage for our new purchase and not involve our current property at all?
A. If that substantial down payment is available now and doesn't depend on the sale of your present home, you may well qualify for a mortgage on your new house. Your present home would figure into the lender's calculations, though, because you'd have to show enough income to carry both payments comfortably for many months to come, on top of any other regular debt obligations you may have.
Another option, as you have lots of equity in your present home, is to raise the money you need with a home-equity loan on that house. You'd save on closing costs.
Q. In a recent column, you replied to a couple who couldn't put a mortgage loan against their manufactured home. Your answer was that they couldn't get a mortgage because their home was on rented land, therefore they did not own "real estate."
So how do you explain townhouses and condos? The "owners" of the unit don't own the land, but they get mortgages and home equity loans all the time. We owned one, and what we owned was the interior of the house, not the ground it sat on.
This makes no sense to me. It simply seems like an example of the banks and mortgage lenders being outright snobs in thinking that manufactured homes are not houses. Beg to differ there. Our next will be a manufactured house, because they are better built than "traditional" stick and brick. Been in one lately? They beat the heck out of any other house we have had.
A. The explanation involves some legal hairsplitting.
First off, the buyer of a condo receives title to one specific unit and also gets part ownership of what are known as "common areas." Those include not only halls, stairs, swimming pool and parking areas, but also the land under the development. Legally, then, condo ownership does include some land. And depending on the form of organization, some townhouse owners have title to the specific land beneath their units as well as the roofs above them.
I can understand your sensitivity to the old snobbery about "trailers," which later had more dignity when referred to as mobile homes and are now classified as manufactured housing -- and yes, they're often very well-built.
But banks are allowed by law to make mortgage loans only on real estate, which is defined as land and anything permanently attached to it. If your next manufactured home sits with a foundation on a lot you own, you won't find any prejudice against its qualifying for a regular mortgage.
• Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (include a stamped return envelope), or readers may email her through askedith.com.
2011, Creators Syndicate Inc.