Buying a new home, what do you think of this deal?

Question

I'm buying a new house! I close on Monday! wooo hooo! Not bad for a 26 year old and a 24 year old to be married in June.

House was appraised for $315k (originially listed for $400k a year ago), and we're paying $275k, how's that for a deal?? We got a 6% rate on our 30 yr, fixed mortgage, with 20% down, or $55,000. Not bad eh?? This is in Palm Beach County, Florida.

It will probably go down a bit more, but not much, houses are selling still way above this price, according to the past 3 months of comps, most are selling well into the mid-300's recently.

I think you gotta catch it on the way down, while it's still going down. Otherwise you will miss the botton, how can you possibly know you're at the bottom??? You don't until it's going up!!! And so are the prices, and all the desperate sellers are hopeful!! Too late, there goes your steal. Do you agree?

Also, we plan on living there for at least 5 years if not 10.

Answer 1

Many buyers are doing exactly what you have done, carefully watching the market to see indications that prices are going to start going up.

Sounds like you got a nice price for your new home.

Congratulations, nice early Christmas present for yourselves.

Answer 2

Is it a good deal? You don't provide enough details. What's the fair market value of the home today? What's the length of the contract? What portion of your payments are credited toward the purchase price? What's the interest rate based on? And on and on and on. If you've got $10,000 in cash, you can probably get a better deal than you've negotiated. And you've got plenty of other options. Lease-purchase, lease-option, equity share, subject to, wrap mortgage, a land trust with an investor beneficiary. Those are just a few things that come to mind. Just doing a quick calculation, if you had a 30 year mortgage on $90,000 with payments of $650, you'd be paying 7.83%. Doesn't sound like you're getting a good deal today; your interest rate would already be well above 7%. With good credit, you'd be able to get a loan at 5% or less. On $90,000, that'd be $483 a month. Again, you don't say how much (if any) is going to the purchase price. Still, that's a big gap between $483 and $650. So, even with poor credit, look at other options. First, though, check with a mortgage broker and really, truly determine what your credit score is. Find out what you could buy today. Then, with the broker's input, get an estimate on how much you could raise your score in 9-12 months. Then find out what you could buy with that better score. A few other points: No, you do not need something very soon. You'd like something very soon, but...need? No. Not trying to discourage you from buying now, but even if you want to buy now, you can do better. And I'm not a lawyer, so this isn't legal advice. However.... Regarding "booting you out." If you're buying a home, there's a foreclosure process. Depending on where you're located, that can take 4-6 months or more. Missing one payment doesn't result in getting kicked out. On the other hand, depending on how it's written, a land contract (or a lease-option, or contract for deed) can specify that one missed payment results in a forfeit of your option fee. Further, it's often an eviction process, not a foreclosure, under one of those other techniques. So, while you can lose your home for non-payment with a conventional mortgage, you typically have more protection and more time than with some of those other strategies. Hope that helps.

Answer 3

So you think that you're ready to buy your own home? Hopefully you've done a little research online to make your first home buying experience a good one. First of all you should contact a mortgage broker that will preapprove you for your new mortgage. This is now more important than everloan application. The mortgage broker will also run your credit. With all this information in hand the mortgage broker will see if you have enough income for the price of the home that you would like to purchase.

Answer 4

Sounds like you are getting a good deal. Just remember the real estate market is not expected to rebound for a year or two so you will need to stay put in order to get a good return on your investment. You are almost always better to invest in a home rather than pay rent.

Answer 5

I agree with the above answers and I think you did a good job.

You should really plan to stay at any house for a least three years, so you can recover your closing costs and everything else.

You are in great shape then. Enjoy your new home!

Answer 6

that is awesome. me and my husband just did this too and found a 3/2 attached garage for 147, 000 1/4 acre, built in 2006 (in central florida). was a sweet deal too. Good job!