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Using land as collateral

Posted on: 23rd Oct, 2007 07:38 pm
I own land in Arkansas. I have a clear deed to 34 acres. I have a manufactured home that has mortgage with a high interest rate on the loan. My credit is flawed and I would like to refinance and cash out enough to pay off a small amount of debt. The home appraises at $67,000, the land appraised at $1,500 an acre last year, so approx $51,000. I only owe $25.500 on the home. I am looking to borrow around $40,000. Is there a lender that would consider me for a loan? I ahve made timely payments on the home for the past 12 months and also own another property that has timely payments in the past 12 months, but I do have a low credit score. I have a decent income for Arkansas and have been at my place of employment for 3 years. Thanks in advance.
Hello Kmarie,

If you want to go for a cash-out refinance, you have to keep the manufactured home as collateral, since the mortgage is against that. You can not use your land as collateral for refinancing the loan on your home.

If you want a separate loan altogether using your land as collateral, you can try at the local banks for that.
Posted on: 23rd Oct, 2007 11:37 pm
Hi kmarie,

You can get a refinance loan if you keep your manufactured home as collateral. As your credit score is low, the interest rate might be a bit higher. But don't worry, you will surely get it

Wishing you Best of luck,
Larry
Posted on: 24th Oct, 2007 02:14 am
If you have had clear credit for 12 months (not just the mortgage but everything) then you can apply for a FHA mortgage on your manufactured home (so long as its on a permanenet foundation). You can get up to 95% of your home value so long as you meet income qualifications. Or you can try to get a seperate land loan from a lender that specialises in lending on farmland.
Posted on: 24th Oct, 2007 08:03 am
I don't think I worded my question properly. The home sits on the land that I own, I want to try to maybe mortgage it all as one property. I just need enough to pay off the home (25,500) and approx. another 15,000. Togehter, the home and land appraise at almost 110,000. Is it possible to do this? I do not have clear credit. I do have some good credit in the last 12 months, including timely mortgage payments on 2 properties, but my credit score is under 600.
Posted on: 24th Oct, 2007 01:12 pm
Hi,

I think you can only refinance your manufactured home to get the required amount. It will be easier as the home already has a mortgage on it.
Posted on: 25th Oct, 2007 04:42 am
We have a home that we are renting in Texas (where we were stationed) and we did owner financing for a parcel (it already has utilities avaliable for our future home) in Kentucky where we will be stationed next. The Texas property is valued at $102k, the Kentucky parcel is valued at $105k. Can we combine them into one loan? Can you refinance land or get a line of equity on land? Once we put a house on it, can we use the Kentucky property to pay off the Texas property?
Posted on: 04th Jan, 2008 08:26 am
Hi Lyn,

Welcome to the forum.

I think you can can combine the two loans in one and refinance but for that reason you have to shop a bit for lenders.

Best of luck,
Larry
Posted on: 04th Jan, 2008 03:44 pm
That's good news. Since we are renting our Texas home, will it be considered an investment property? We can't seem to part with it since we never really got a chance to live in it (we came on orders to move within weeks of closing). Also, it'll be two years before we'll build on the parcel; how should we proceed on combining mortgages in such a situation?
Posted on: 05th Jan, 2008 11:50 am
the only way to use raw land as a down payment on a construction loan is to have the land paid off right?
Posted on: 09th Jul, 2008 07:08 am
Welcome riley.

Are you willing to sell the row land to use the sale proceeds as down payments to get construction loan.
Posted on: 10th Jul, 2008 05:16 am
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