My wife and I purchased a home about a year and a half ago we did not have the best of credit and got a whopping 10.2% interest rate. So our house payment is about $1300.00 a month on a $137,000 mortgage, along with a 5,000 second to pay the closing and a loan off from the man we purchased it from.
so our total monthly payments are $1500.00. So my dad offered to buy the house and we pay him the payments, so we could get out of debt. So when he purchases the home it will be about $142,000 and that will be probably what the house appraises for. We don't have any money to give my dad for closing or down payment. How much do you think he will have to come out of pocket with? Is there a way to minimize the amount he has to come out of pocket?
2007-03-11 07:41:55 · 5 answers · asked by just me 2 in Business & Finance ➔ Renting & Real Estate
You can approximate closing costs to be about 3% of the purchase price (max). So, if the purchase price is $142k, you can expect to pay upwards of $4200.
Good luck!
2007-03-11 08:08:53 · answer #1 · answered by Art 4 · 0⤊ 0⤋
WOW 10.2? That's robbery!! My sincere answer? Make sure that you know that when he buys the house that the possibility exists that if you ever divorce, even though you have paid for the house, you will have no claim to it!! Think long and hard, just because everything is fine right now don't mean that in the future you might have trouble!!! Try to get him to sign a contract with you stating that you are "BUYING" the house from him or you may very well lose everything you put in it!
As far as him buying the house, if you can get an equity loan on the property. i.e. if it appraises higher you can get the money there and give it to your father in law for closing costs, etc. Another tip shop around for your loan!! There are many sites out there that will give you several bids, read the fine print and closing costs carefully, you can literally save 1000's.
Hope this helps!
2007-03-11 14:49:37 · answer #2 · answered by Rhonda B 6 · 1⤊ 0⤋
It depends on location and how he is buying the house. If he is getting a loan for it, it might be quite a bit (and the intrest rate might not be much better since it will be "investment property"). Other than that, the fees will depend on what he is doing (if you are requiring an apprasial to determine the value that is more). If it's more of a cash deal, then he just needs to pay the fees that the city/county/state assess for the paperwork (and possibly the realtor or lawyer fees, if you want to make sure that everything is taken care of).
Minamally, do the paperwork together and just transfer the title (especially if he is just writing a check for it).
In addition, keep in mind that the real estate taxes might go up significantly due to the owner not living in the property.
2007-03-11 15:23:36 · answer #3 · answered by contemplating 5 · 0⤊ 0⤋
Yes, I know a company that focuses less on fees but more on volume with customer service. I think Hamlin Mortgage can save you some money. They are a smaller company but do business in 48 states. Check out the free evaluation form at the source website. It takes a few seconds to fill out and a loan officer from Hamlin will contact you within 24 hours. Good luck.
2007-03-11 20:14:16 · answer #4 · answered by CALIFORNIA GOLD 3 · 0⤊ 0⤋
There are times when banks are trying to generate business that they dont charge loan fees--and some are smaller than others when they do--ask around and do some research in your area--it can save him a lot of money.
2007-03-11 14:50:20 · answer #5 · answered by Nemo the geek 7 · 0⤊ 0⤋