What are my options w/ this house?? Please help!!?

Question

Story in short: old woman that lived alone in a house behind my parent's (where I grew up) passed away...her niece who lives in TX has been cleaning out the house and fixing it up little by little. I love and want this house. It is in a neighborhood I know and love, would be great for my "step daughter"...how do I approach this w/ the TX lady? Problem is...I have only about $300 saved up, this is sudden so I wasn't prepared. With our income we can afford a mortgage. I've been told to rent to own, or buy, or take a 5 year mortgage for 5 years where the payments just go towards the interest on the mortgage..etc...what is that? how do I do it? I need advice...this is my dream opportunity and I don't want to screw it up. The TX lady is coming back in April to continue working on the house...but I'd like to contact her before then.

Answer 1

She would probably be relieved to find out that she has a buyer without having to put a great deal of sweat in trying to spruce up the house for the open real estate market.
By going directly to her BEFORE she has listed the house with an agent you will save her a bundle on commission fees, so let her know you want that house, the sooner the better.

Once you have her asking price, then you can evaluate whether or not she is asking a fair price by researching other similar houses that are listed in the same area as the house you want to buy.

With a general asking price, & your other financila information in hand, you can go to your banker, & have them spend as much time as is necessary explaining your options for financing the purchase of the home.

Rent to own might be a better option for someone who has trouble qualifying for a mortgage. If you are sure that you will have no trouble qualifying for a mortgage on this house then I suggest that you rule out rent to own.
However, you may find some oposition at the bank unless you can put up at least 10% or more of the purchase price on the home.
You amortize the mortgage over as long a period as you can to spread out the payments & keep them at an affordable level.
If you find that your monthly payments are about $1,000 a month with the mortgage amortized onver 35 years, & you believe that you can afford something like $1,500 a month then by all means reduce the amortization period to something like 25 years.

The term of the mortgage is an important consideration when negotiating the interest rates. You can usually get a better interest rate if you sign a longer term like 5 years. But if you are confident that the rates are going to drop even lower that they are right now by next year, then sign up for a term of only 1 or 2 years.

A quick way to pay off your mortgage is to agree to bi-monthly or even more frequent payments like weekly. That way more of your payment is directed to the principal sum instead of just interest during the 1st few months of the mortgage.

I had a 15 year mortgage that I paid off in about 13 1/2 years because I chose to make bi-monthly payments.

Good Luck on your new house.

Answer 2

Hey Swaygirl, how's it going? First you should talk to the house owners or their representative to find out if they want to sell the house or you could go to a real estate agent and ask them to approach the owner. The only problem with that is that they will be bugging you to buy something else if that deal doesn't materialize.

As far as getting a mortgage, your best bet is to go to a mortgage broker (not a bank or loan company). You should be able to find one in the yellow pages. A broker can search and find the best rate for you and also where you might be able to get a mortgage without a huge down payment. You will have to pay the broker a fee but it will be worth it. Also you could look into the possibility of getting the money for a down payment through a second mortgage but be sure you can afford to make the payments. Good Luck!

Answer 3

Share all of this with the niece and ask her if you can buy the house.... the important thing is to share what's in your heart ... how you feel about the house and the neighborhood etc. Some times people will do things from the heart that they might not have thought of other wise.. tell her the low down payment situation and ask her if she is interested in selling and if so what can we work out for either the price of the entire house or for just the down payment portion? ask for what you want and be willing to negotiate ... even if she doesn't want to sell now.... leave her your name and number and ask her to contact you if she changes her mind.... take a risk... and don't be attached to the outcome

A couple of practical suggestions 1) talk to a reputable lender and get prequalified for a loan so that if the niece says yes, you can move forward quickly, the lender will have several options and you can pick the one that best suits your financial situation...2) offer market value based on the appraisal (which you will have to do for most loans let the lender engage the appraiser for you) 3) if you make arrangements to pay her for the house and make payments with no down payment... use a title company or bank escrow agent to manage the payments.... that way you have a record of the transaction from a third party. Good luck!

Answer 4

first things first, ask the TX lady if she's planning to keep the house, if so, you have to respect that decision, otherwise if she claims that she will let it go sometime in the future, offer her that you are interested to buy it, just inform her to update you when exactly that time will so you can also prepare for buying the house, if she freely agrees that you can buy the house now, then you can apply for a 100% loan, if your a first time home buyer you may get a lower interest rate,in addition to that if you are planning to claim this as an primary residenc also this will help you get pre approved with a nice interest rate.Here's a little tip when deciding to apply for a loan:

1. 30/40/50 yr fixed loan programs- this is advisable if you plan to keep the house for a long term stay , because your monthly payment will be spread out for the whole term and your payment is constant every month
2. Option ARM programs- your rate is adjustable after the term due, depending on the market which your monthly will e based on it as well, it can go higher or lower...also this is advisable if you plan to sell or refinance the house ..


also when you apply for the loan make sure you want to clarify how many prepay penalty you want...prepay penalty can be 1 , 2, 0r 3 years. This can help lower down your rate, also if you choose a prepay you are obligated to keep the house depending on how many prepay you want afterwhich you can refinance or sell your house...also make sure that you loan officer provide you with a good faith esimate , w/c includes how much your bringing to the settlement, it also reflects your monthly payments and also prepaid items ( hazard insurance, property taxes) so there's no surprises at settlement....

but before all this you need to apply for the loan and get pre -approved....keep in mind that your credit history is important and all your assets.

Answer 5

First see if she is willing to part with the house.
Second, see if your step daughter would like to purchase a house.

If the answer to both questions is yes then go down to a bank and/or mortgage company to see how much you/step daughter can afford. $300 might be a little low but there are many programs out there that will be able to work with you/her. If you can work out a price that is mutually acceptable great. If you cannot try working the numbers where she will hold a 2nd position mortgage. But realistically since you already know if you/she are/is prequalified you have put her ahead of the game in the path to homeownership.

Answer 6

You should speak to some mortgage people to hear your options. Different banks can offer you different loans so talk to a few. One option is the 80/20 loan. The 80/20 loan is 2 loans. 80% is for your mortgage and 20% is for the down payment. There are many options for 1st time home owners depending on your income and credit.

Answer 7

Go to Ditech.com to see if you can qualify for a home loan. (You can choose from several other loan companies if you would rather, but Ditech makes it easy!) Get pre-approved for a loan, and then approach the niece.

You should probably use a real estate agent to handle all of the paperwork - it's much harder than it looks!

The niece may be relieved to have someone interested in the house before she even lists it. Good luck!

Answer 8

Why don't you ask the TX lady if she even wants to sell the house before you jump through too many hoops.

Answer 9

Contact the lady and she if she even wants to sell in the first place. If she doesn then contact a bank or credit union and discuss your fininancing options.

Answer 10

Find out her name if you dont have it by contacting the property access office.Call her & tell her that you are very interested.Tell her that you are willing to do the work if she has you there & to buy the house.