Q-We purchased a double-wide mobile home seven years ago. We obtained a loan of 25 to 30 years at 14.5 percent interest. I have asked the lender continually to refinance at a lower rate. The lender always says no. I have called at least 20 banks and financial institutions, and no one will refinance a mobile home. They say it is not considered real estate.
I have rented it out for two years, but I take a loss of more than $100 every month because of the high interest rate.
What is your advice?
A-Single and double-wide mobile homes can be refinanced to take advantage of lower interest rates. If your current lender does not have a refinancing program, contact local mobile-home dealers to find the names of financial institutions actively making mobile-home loans.
I contacted Green Tree Financial Corp., a large national lender. The general rate of interest for refinanced conventional mobile-home loans is 12 percent. Under their land-home program, if the mobile home is attached to a permanent foundation or the original financing includes the home and land, the interest rate is 10.75 percent and requires 2 percent of the loan amount to be paid as an origination fee.
If lenders are unwilling to refinance because the home is not owner-occupied, then resale is your only alternative.
List the home for sale with a local real-estate broker who is experienced in the sale and financing of double-wide mobile homes. Let the buyer and the broker worry about financing the sale.
Q-I am 53 years old and plan to sell my home to invest in a business. Must I wait until I am 55 years old to claim my $125,000 capital-gains exemption? Would it be possible to delay this claim until I am 55 by using the two-year period to invest in another home?
A-You cannot sell your home at age 53, defer reinvestment in another personal residence, and then claim exemption from taxation at age 55.
You must be 55 years old at the time your personal primary residence is sold to claim up to $125,000 of gain exempt from income taxation. The date of sale is the taxable event.
Your options are to wait until you are 55, sell your home and claim up to $125,000 of gain exempt from taxation or sell your home at 53, wait up to two years, reinvest gains in a new personal residence and thereby defer taxation. These privileges cannot be combined, but keep thinking creatively.
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Have a question about real estate? You can write to George Karvel in care of the Chicago Tribune’s Your Place section, 435 N. Michigan Ave., Chicago, Ill. 60611. Answers will be provided only through the column.
