Selling a Mobile Home While Still Owing Money
Explore the options included when you need or want to sell your home while still owing debt.
Good news: you can still sell your mobile home even if you still owe money on it. However, you will need to satisfy the lien prior to transferring the title to the next owner.
This can be done in three ways. You can:
- Sell the home for what you owe on it (or more).
- Sell the home for your asking price and then cover the rest of the cost.
- Contact your mortgage company and request a short sale.
The first option is, of course, the best option, as it leaves you with the least financial obligation. However, this is often easier said than done, as mobile/manufactures homes tend to depreciate in value quicker than you can pay off your initial loan. For this reason, sellers end up at option two, which requires pitching in your own money in order to make a sale.
For example, you’ve owned your mobile home for four years. You purchased the home (used, not new) for $25,000 and the home is now worth only $8,000. This poses a problem, because you most likely still owe more than what you could reasonably sell it for. You could either ride it out until you pay off the loan or fill in the gap with your own money.
Though undesirable, this is a viable option as you don’t want to take a hit on your credit by relinquishing the home back to the bank; you cannot continue to pay the lot rent, either.
Our advice? Pay the difference, if possible. This will save your credit and solve your problem.