EDIT: Damnit. Private lender. Not pirate lender.
My mother is currently living off of social security. Between her's and my father's (passed) she makes enough to cover her rent and bills but she's now suddenly determined to buy a house.
She went to the bank to ask for a loan for a nearby house and was denied because of her income. She recently found a mobile home for sale and was denied a loan from the bank because they won't give out a loan for a house on property owned by someone else (it's in a mobile home park).
She told me "a friend" directed her to a private lender that will give her a loan for it. I don't know a lot about private lenders, but I immediately hear my late dad's voice in my head telling me how dangerous and stupid this would be. Private companies are never as well regulated as banks. A quick Google search about private lending regulations led me to Wikipedia which states:
It is not advised for residential homeowners and should be considered only for business capital and with the careful advice and oversight of an accountant and real estate attorney as the collection methods may be more aggressive in the event a borrower cannot repay. Private investors do not usually have the means or interest in long protracted workout agreements, and will usually go to court quickly as a means of recovering their monetary investment.
Her current rent is $800. She claims the mortgage with zero-down (she has no savings at all) plus the lot rental fees would be about $850. I'm assuming she hasn't even considered the cost of homeowner's insurance and the upkeep savings required for emergency repairs.
Is my intuition correct? Is this a good way for her to end up homeless? If so, what's a good way to frame that to make her understand?
Submitted September 27, 2017 at 01:20PM by 324523456345 http://ift.tt/2hwi07I
