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Answers (11)
- Pasadenan
- Contributions:21466
Here is what Zillow indicates is for rent in Florence (with links to details):
Address rent bedrms bathrms
7230 W Sonoma Way $850/mo 2 2
2656 N Palo Verde Dr $875/mo 4 2.5
2642 N Palo Verde Dr $925/mo 4 2.5
2232 N Monticello Dr $950/mo 3 2
6234 W Yorktown Way $1,200/mo 3 2.5
2921 N Daisy Dr $1,250/mo 3 2
2225 N Pecos Ct $1,300/mo 2 2
2243 N Brigadier Dr $1,300/mo 3 2
7321 W Sonoma Way $1,300/mo 2 2
4275 N Coronado Dr $1,400/mo 2 2
6405 W Heritage Way $1,500/mo 2 2
6030 W Montebello Wy $1,595/mo 5 4.5
7992 W Desert Blossom $1,800/mo 3 2
6036 W Yorktown Way $1,950/mo 3 2
Address rent bedrms bathrms
7230 W Sonoma Way $850/mo 2 2
2656 N Palo Verde Dr $875/mo 4 2.5
2642 N Palo Verde Dr $925/mo 4 2.5
2232 N Monticello Dr $950/mo 3 2
6234 W Yorktown Way $1,200/mo 3 2.5
2921 N Daisy Dr $1,250/mo 3 2
2225 N Pecos Ct $1,300/mo 2 2
2243 N Brigadier Dr $1,300/mo 3 2
7321 W Sonoma Way $1,300/mo 2 2
4275 N Coronado Dr $1,400/mo 2 2
6405 W Heritage Way $1,500/mo 2 2
6030 W Montebello Wy $1,595/mo 5 4.5
7992 W Desert Blossom $1,800/mo 3 2
6036 W Yorktown Way $1,950/mo 3 2
- Pasadenan
- Contributions:21466
Better yet, forget the Real Estate Agent, and just post a loan quote request on Zillow Mortgage Market Place using the "mortgage" tab at the top of this page.
The chart to the right is the median of rates quoted on Zillow by thousands of loan officers for 20% down, 680+ FICO, 30 year fixed. It is not an "advertisement". The loan officers are in competition for the loans. And the loan officers were stating rates were down to 4½% this week, in spite of those quoting having a middle quote rate of closer to 4⅝%.
Of course someone paying less than 20% down pays more. And of course someone with lower than 680 middle FICO score pays more. And of course someone that just came out of bankruptcy pays more (which is why I don't believe the 6% was even correct but would be higher). Which is why it makes no sense to buy now when all the signs are that it will cost much less in 6 months to two years depending on how fast one works at repairing their credit rating.
As for the rents in the area? Yes, 1% is a good "rule of thumb", but Zillow offers a RENT Zestimate now, with a tolerance range, and it is based on what is renting in the area, which is different than just pricing mortgage payments and expenses. The numbers I gave were the Rent Zestimate range for that area for that target house price range, based on a quick search and looking at a few randomly.
You don't go to a milk man to buy a loaf of bread... Why would you want to go to a used house sales person with 140 hours of "education" to get information on borrowing money and the financial implications of such economic decisions? Remember, that is why millions of Americans lost their homes in foreclosures and went into bankruptcy in the first place! And why millions more are losing their homes this year, and millions more filing bankruptcy this year! (1.05 Million Foreclosures, 1.6 Million Bankruptcies estimated for 2011). usdebtclock.org
The chart to the right is the median of rates quoted on Zillow by thousands of loan officers for 20% down, 680+ FICO, 30 year fixed. It is not an "advertisement". The loan officers are in competition for the loans. And the loan officers were stating rates were down to 4½% this week, in spite of those quoting having a middle quote rate of closer to 4⅝%.
Of course someone paying less than 20% down pays more. And of course someone with lower than 680 middle FICO score pays more. And of course someone that just came out of bankruptcy pays more (which is why I don't believe the 6% was even correct but would be higher). Which is why it makes no sense to buy now when all the signs are that it will cost much less in 6 months to two years depending on how fast one works at repairing their credit rating.
As for the rents in the area? Yes, 1% is a good "rule of thumb", but Zillow offers a RENT Zestimate now, with a tolerance range, and it is based on what is renting in the area, which is different than just pricing mortgage payments and expenses. The numbers I gave were the Rent Zestimate range for that area for that target house price range, based on a quick search and looking at a few randomly.
You don't go to a milk man to buy a loaf of bread... Why would you want to go to a used house sales person with 140 hours of "education" to get information on borrowing money and the financial implications of such economic decisions? Remember, that is why millions of Americans lost their homes in foreclosures and went into bankruptcy in the first place! And why millions more are losing their homes this year, and millions more filing bankruptcy this year! (1.05 Million Foreclosures, 1.6 Million Bankruptcies estimated for 2011). usdebtclock.org
- Loren Hoboy, "ArizonaDreamHomes"
- Contributions:77
While the questions is now more confusing in light of the additional information provided about it being bank owned, I will chime in with a correction to some other comments.
INTEREST: Interest rates over 5.5% are more the norm for 3.5% down payment FHA loan with 0 points. Someone with a low credit score of 640 could well be paying 6% APR. The days of 4.75% are gone unless you are paying points to buy down the interest rate. The rates of 4.88% shown in the ad to the right on this site have the borrower paying 2.11 (%) extra in points to get that "low" rate on a 20% down conventional loan. Nothing is free in life. A bankruptcy within the last 3 years as described will probably require the borrower to pay a higher interest rate then the norm.
RENT: Next, an investor typically will be getting rent at about 1% of the purchase price plus the HOA fees and perhaps if it has a pool, the monthly pool maintenance cost will be added in.
Kim, to get the best advice, contact an experienced Buyer's real estate agent who will be able to recommend a lender. Between the two of them you can get actual figures from experts based on all the facts and be better able to make a decision.
INTEREST: Interest rates over 5.5% are more the norm for 3.5% down payment FHA loan with 0 points. Someone with a low credit score of 640 could well be paying 6% APR. The days of 4.75% are gone unless you are paying points to buy down the interest rate. The rates of 4.88% shown in the ad to the right on this site have the borrower paying 2.11 (%) extra in points to get that "low" rate on a 20% down conventional loan. Nothing is free in life. A bankruptcy within the last 3 years as described will probably require the borrower to pay a higher interest rate then the norm.
RENT: Next, an investor typically will be getting rent at about 1% of the purchase price plus the HOA fees and perhaps if it has a pool, the monthly pool maintenance cost will be added in.
Kim, to get the best advice, contact an experienced Buyer's real estate agent who will be able to recommend a lender. Between the two of them you can get actual figures from experts based on all the facts and be better able to make a decision.
- Pasadenan
- Contributions:21466
I agree with you Connie; the original question makes no sense of any kind in reference to the last post of the original poster.
Clearly it is just a "straw man", or a Real Estate Agent gave the person very inaccurate information.
6% interest is high for the present mortgage market (4.6% would be more reasonable), but if one just discharged a bankruptcy it still will take time to rebuild one's credit score.
Amount available for a down payment was not mentioned. If we assume the minimum of 3.5% for FHA... payments would be $494 per month at 4.625% as compared to $576 per month at 6%. Net difference in interest over 30 years is $29.5k ... not $40k. Of course there also is the issue of the Mortgage insurance that wouldn't be required if 20% could be put down. But I don't see someone just coming out of bankruptcy with $20k in the bank, plus the additional $3k for closing costs and the additional $1k for inspections and other.
Yes, the market values are still falling in Arizona, so maybe prices will be reduced by $20k by next year? Maybe not; maybe only by $10k. But still, I see no reason to buy now.
Sure, 3 years at 6% on a 30 year loan is only $20.7k, but that is not all the expenses one needs to compare to renting, and one would still owe $92.2k on a house that would only sell for $90k.
As for a tax write off? You've got to be kidding! First year interest is only $5728, and the standard deduction for single $5700. And for married, the standard deduction is $11,400. Second year interest is only $5655. Thus, itemizing on a schedule A is pointless unless already itemizing on schedule A for other reasons, such as charitable giving or major medical expenses.
Zillow indicates a $100k home would presently rent for between $635 and $1.5k per month. So $40k rent for 3 years is not out of line and appears to put one ahead of purchasing by about $15k.
Clearly it is just a "straw man", or a Real Estate Agent gave the person very inaccurate information.
6% interest is high for the present mortgage market (4.6% would be more reasonable), but if one just discharged a bankruptcy it still will take time to rebuild one's credit score.
Amount available for a down payment was not mentioned. If we assume the minimum of 3.5% for FHA... payments would be $494 per month at 4.625% as compared to $576 per month at 6%. Net difference in interest over 30 years is $29.5k ... not $40k. Of course there also is the issue of the Mortgage insurance that wouldn't be required if 20% could be put down. But I don't see someone just coming out of bankruptcy with $20k in the bank, plus the additional $3k for closing costs and the additional $1k for inspections and other.
Yes, the market values are still falling in Arizona, so maybe prices will be reduced by $20k by next year? Maybe not; maybe only by $10k. But still, I see no reason to buy now.
Sure, 3 years at 6% on a 30 year loan is only $20.7k, but that is not all the expenses one needs to compare to renting, and one would still owe $92.2k on a house that would only sell for $90k.
As for a tax write off? You've got to be kidding! First year interest is only $5728, and the standard deduction for single $5700. And for married, the standard deduction is $11,400. Second year interest is only $5655. Thus, itemizing on a schedule A is pointless unless already itemizing on schedule A for other reasons, such as charitable giving or major medical expenses.
Zillow indicates a $100k home would presently rent for between $635 and $1.5k per month. So $40k rent for 3 years is not out of line and appears to put one ahead of purchasing by about $15k.
- ConnieK_Oklahoma
- Contributions:2900
if maybe I am confused, I don't really understand the question anymore bbecuase if the owner is the bank it's not a typical owner carry note, it's a mortgage from the bank that owns the property. it sounds like your simply asking to buy or rent. but you refer to buying as 40 too much. yet the house is under $100K. So I guess to understand your question, I would need to ask, do you mean that the asking price of the home is $40,000 too much ? and if so ...are there comparable homes priced $40,000 less than this one? if so, then it would seem to make more sense to consider buying one of those.
- kimdawson
- Contributions:2
This is not a rent to own It will go thourgh a title escrow company. I will be able to right off intrest. The home price is under 100,000. Owner is bank. 6% intrest. I just dischraged a chapter 7. We really like the house and would have no problems waiting it out in this market.
- Pasadenan
- Contributions:21466
In this market, with present interest rates, there is absolutely no reason of any kind to have a seller finance, especially if they have an existing mortgage that will not be paid off.
And as already mentioned, there is a high probability in such a situation that you will be spending more on interest payments than you would have spent in rent, and a high probability you would never own the home, and an even higher probability that expenses and time for repairs and maintenance would become your responsibility rather than a landlord's.
And if you want a change in title? The prior mortgage is usually "due on sale or transfer", except in the cases where it might be assumed, but you still need to qualify for the loan if assuming it, and the rates are much higher on the loan being assumed than presently being offered for new mortgages, and the loan amount would not be sufficient for your needs.
The only ones wanting people to do such things presently are the Real Estate agents that expect to get a commission out of the transaction.
And as already mentioned, there is a high probability in such a situation that you will be spending more on interest payments than you would have spent in rent, and a high probability you would never own the home, and an even higher probability that expenses and time for repairs and maintenance would become your responsibility rather than a landlord's.
And if you want a change in title? The prior mortgage is usually "due on sale or transfer", except in the cases where it might be assumed, but you still need to qualify for the loan if assuming it, and the rates are much higher on the loan being assumed than presently being offered for new mortgages, and the loan amount would not be sufficient for your needs.
The only ones wanting people to do such things presently are the Real Estate agents that expect to get a commission out of the transaction.
- Loren Hoboy, "ArizonaDreamHomes"
- Contributions:77
Jeff is correct. I would add that you should engage a qualified Buyer's agent or real estate lawyer, for any owner carry/financing transaction. You want to be sure the deal is structured on paper to use a neutral 3rd party escrow company to received and disburse your payments, so you know the sellers lender will get paid and not foreclose. Only an experienced Buyer's Agent should handle the Contract for Deed and Owner Financed Contracts, otherwise get a real estate attorney.
- ConnieK_Oklahoma
- Contributions:2900
I can't help but think that these two are not polarized opposites and must not be your only two options. maybe the thing to do is to seek other options al together. Why plan renting for 3 years, or if you must pucrhase an owner carry...why pay 40 too much. perhaps I misunderstand the question??
owner carry is nearly always a very bad idea. For reference, see the other threads today about a breach on an owner carry sale.
- Jeff Masich, "Arizona Homes Land"
- Contributions:508
Dear Kim:
Good point. Owner carry loans are usually overpriced on the home as the owner's know people are willing to pay more because they may not be able to get a conventional mortgage and purchase a deeply discounted foreclosure.
On a long term owner carry, you will not be paying on the principle that much, so it is like paying rent anyway. The advantages are in the tax savings (deductibles).
If you can find a good deal on an owner may carry, it may be worth it. Buying a older home in a rural area where the owner owns the home and the demand is less due to the longer commute may make a difference.
Talk to your accountant about the tax issues and your Realtor about owner carry deals that are at a respectable price.
Also, talk to your lender, if you have not already, to see if there is any hope for a conventional loan.
May I wish you the best.
Jeff Masich
Arizona Homes and Land
HomeSmart
should i rent for 3 y and fork out 40 thousand in rent or purchase a owner carry for 40 to much
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