Which House To Purchase? Help!
All advice appreciated. I've sold my home; closing will be held in less than 2 weeks. I am going to purchase a home in an area 5 hours away from where I presently live, which puts restraints on the process. I need a house that is move-in condition and in the 40-55k range. My downpayment is 30-35k cash from equity in my present home. I haven't worked in a few years (though I will be when I relocate) & must have unconventional financing. I know a few re investors in that area who will consider being a mortgage-holder for the balance of purchase upon their inspection & approval of the property. I have also found a home FSBO that the owner will OF for me.
My dilemma: The investors require 15% interest. The FSBO is only 3% interest. What a deal, but...
All of the homes on my prospective list are comparable in size, location, etc. etc. These homes range in price from 45k-58k. All listed w/ agents. The FSBO house is in the same category as above, but they are asking 68k, tho they say they're "somewhat negotiable." Their appraisal done just last month listed the house as 75k market value.
I'm confused and have to make a decision ASAP. I only want to finance for 10-12 yrs MAX (the shorter the term the better). Please some insight and advice!
Let's see, I think its better to go with the FSBO. I would offer them $59,000.00 @ 7% = $ 4,130.00.
For a total selling price of $63,130.00; with terms of 120 months your payments would be around $526.00 per month.
You have a workable solution here; we all should be this lucky.
I calculated a mortgage payment as follows:
68,000
34,000 down
3%
10 years
your payment is 328.31or over the life of the loan you pay $73397.20
54,000
34,000 down
15%
10 years
your payment is 322.6731or over the life of the loan you pay $72720.40
thats only a difference $676.80 over the entire life of the loan.
So you can see either house costs you essentially the same amount. naturally if you can get either house for less than these numbers it will change things for you (theoretically). in this case I would deffinatly pick the house that I like better or that has more potential for appreciation. If you are going to live there get the more comfortable one. (watch out for structural and mechanical problems such as plumbing or roof). Good luck.
Josh
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"if you are going to be in Real Estate you better know how to fix a broken toilet"[ Edited by jpchapboy on Date 11/22/2003 ]
Thanks for your input! However, I need to keep my monthly notes really, really low, no more than 250. Can you come up w/ another good proposal for me to bring to the table w/ the FSBO? Yep, this is workable, but not much time to make a decision that is a major financial & personal one (that much money & a home I'll be satisfied w/ a looooong time). Thus, here I am begging you guys for your words of wisdom & experience. Could you crunch some more numbers for me?
Could you guys tell me the numbers on these proposals: 61k @ 3%, 63k @ 3%. The FSBO said they were somewhat negotiable on the price, so I'd like to start low but not offensivesly so. Dealing w/ the realtors is another story: have to submit written offers & 8 pages of paperwork, then wait it out for a counter. They refuse to verbally discuss anything $-wise. Time is really important here, so the FSBO is great in that respect...immediate feedback. Also, the re investors have to approve each property first...another hindrance, if you will. Thank y'all so much for all of this assistance! Maybe I'll be able to get some sleep tonight eventually. LOL