What a rip off!!!

In Case you didn't know I sell homes for a living. Recently the company I work for has been advertising to mobile home parks. It is actually a great deal. We buy the trailer that these people are upside down in and get them into a home that has potential to go up in value rather than go down. I have been helping a single mom out in the process. She is going from a double wide trailer to a nice 3 bedroom, 2 bathroom, 2 car garage home with a full basement. In the process we recently paid off her trailer so she could qualify for the financing on her new home. I was completely shocked at what I saw this poor lady was paying for her mobile home.

She had financed $54,766 at an APR of 14.64% for 360 months (30 years)for a monthly payment (including MIP)of a whopping $732.74. In case you didn't do the math $732 a month for 30 years is $263,786! And that doesn't include lot rent fees of about $425 a month and climbing!If you add that to the mix she would be paying $416,786 for dirt she would never own and a trailer that will be worth nothing in a matter of 15 years.

When I saw these numbers I was appalled! someone had literally robbed her and they were getting away with it! The good news is that we are helping her to get out of a mess. Instead of paying $1,157 a month for dirt she'll never own and a trailer that will be worthless in 15 years she is now paying $1,200 and some change for a home that she can take pride in. With grass her kids can call their own, a garage to park her car in, and the good news is when she pays it off in 30 years it will be worth all those payments she made. Another added bonus she'll have through this is tax savings in the amount of a few hundred bucks a month, and her home will be more energy efficient so she'll pay less for heating and A/C.

Moral of the story; don't fall prey to the crooks that finance and sell these mobile homes. They are literally capitalizing on the ignorance of others.

If you ever do consider financing anything there are a few key elements to look at before taking the plunge. First find out the APR and APY. The closer these two numbers are together, the better deal you got on the upfront loan costs. Obviously the lower both of those rates are, the better for you because you are borrowing money for a low cost.

For me the greatest way judge whether or not to ever think about financing anything is to take the monthly payment and multiply it by the number of months I will have to pay it (ex:60 months x $350 = $21,000). That number is the actual cost paid for the item. If it disgusts you it is then a good time to rethink buying whatever it is you are getting - especially if it is a depreciating asset or consumer good. In fact I recommend never financing either. That is just a recipe for disaster!