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Answers (8)
- SteadyState
- Contributions:783
What are the terms for the $13,500 seller financed loan? If the number is under 5.5% the numbers say that you will break even after 7 years assuming home prices do NOT go down and INCREASE by 1% every year for the seven years.
What is the interest rate on your school loan? If it is higher than 5.5% you may consider paying that loan off before you accumulate additional depth.
What is the interest rate on your school loan? If it is higher than 5.5% you may consider paying that loan off before you accumulate additional depth.
- Tim Mellor, "utahtim"
- Contributions:216
If you don't have any more concerns, then it sounds like a done deal. Make sure you get the agent agreement in writing. We agents are generally good people, but sometimes we forget the details. Let us know if you have any more questions.
- wetdawgs
- Contributions:26786
Unless your time frame is five years or longer, I wouldn't touch it. You sound like an ideal rental candidate, which will help you save substantial money over the next few years.
- nately
- Contributions:3
Thanks, Tim. Not having a substantial savings on hand really was one of the big factors.
However, they have since made another offer:
Reduce purchase price by $2,000. Contribute another $2000 to closing costs. Agent commits to waive selling costs if I decide I need to sell in the next few years.
This basically covers all of my concerns. Is it too good to pass up?
The seller is an investor and has another opportunity, which is why he wants to sell quickly. I've already lived in the condo for 2 months, so I'm confident of its quality.
However, they have since made another offer:
Reduce purchase price by $2,000. Contribute another $2000 to closing costs. Agent commits to waive selling costs if I decide I need to sell in the next few years.
This basically covers all of my concerns. Is it too good to pass up?
The seller is an investor and has another opportunity, which is why he wants to sell quickly. I've already lived in the condo for 2 months, so I'm confident of its quality.
- Tim Mellor, "utahtim"
- Contributions:216
I can completely understand your apprehension. Purchasing a home is the largest investment that most people make. If you are only staying in the area 1-2 years, I would probably not purchase. However, things generally take longer than we expert and if where to turns in to 3-4 years than it might make sense. Here are some things to consider:
1. There likely wont be a lot of appreciation in home values in the next few years.
2. Even if you are getting a good deal on the purchase, when you go to sell there are significant expenses that may eat up your equity.
3. Owning instead of renting may have other non-monetary benefits that may make it worth your investment.
4. Do you have a rainy day fund? What if you lose your job and are unemployed for a few months. Will you still be able to keep your home?
5. Most of your mortgage payment the first few years goes directly to interest.
Best regards,
Tim Mellor - Equity Real Estate
1. There likely wont be a lot of appreciation in home values in the next few years.
2. Even if you are getting a good deal on the purchase, when you go to sell there are significant expenses that may eat up your equity.
3. Owning instead of renting may have other non-monetary benefits that may make it worth your investment.
4. Do you have a rainy day fund? What if you lose your job and are unemployed for a few months. Will you still be able to keep your home?
5. Most of your mortgage payment the first few years goes directly to interest.
Best regards,
Tim Mellor - Equity Real Estate
- nately
- Contributions:3
To clarify, I was ready to buy on the first of the year, seller allowed me to rent for a month until the loan went through. Unfortunately, this meant that the FHA loans were not an option which has set us back on getting a loan financed. We had all expected to be settled by now, which is why we're pressing to close this week.
My job is secure, the only reason I am unsure about 2 years out is whether I decide to find another job or go to school again.
Thanks for the input.
My job is secure, the only reason I am unsure about 2 years out is whether I decide to find another job or go to school again.
Thanks for the input.
- Brian Slodki, "SupremeLending"
- Contributions:73
Sounds to me like if you did decide to move in 2 years, it would make money as a rental property. Based on the information you provided, it seems like you are in a decent position to buy the place but if you think you may not have a job in 2 years...
Just dont let preassure be the deciding factor. If you are not 100% comfortable with it... Dont do it. Simple as that.
Just remember that if you put down any money when you signed the contract, It may be gone if you walk away from the deal.
Just dont let preassure be the deciding factor. If you are not 100% comfortable with it... Dont do it. Simple as that.
Just remember that if you put down any money when you signed the contract, It may be gone if you walk away from the deal.
- jdsdaddy
- Contributions:551
Short time frame, 1br condo and an agent and lender telling you you're getting a great deal = step back and think about all the money you're likely to lose.
Am I ready for a long-term investment?
I am committed to be at my new job in the area for the next 2 years (I make $40,000/year gross), but after that, I don't know what will happen. I am 28 and may get married and need a larger place or I may move out of state to go to grad school. I have ~$12,00 in student loans that enter repayment in June, and $1500 in credit cards I need to pay off, but other than that I have no other financial commitments.
I could rent a similar (though not as nice) condo for $650/month. I definitely want to stay in the area for the next 1-2 years, but don't know if making this large of a commitment is the best choice for me. Seller is anxious to close this week, so I'm trying to make a decision under some pressure.
Thanks for the advice!
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