Posted on: 20th Oct, 2009 11:14 am
First time home buyer and looking at for sale by owner. House price is $489K and have $28,000 for downpayment. Seller is willing to finance for up to 5 years at 5%. House is currently appraised a little above $500K. So, no PMI through seller and little in closing costs.
I am assuming my concerns will be what happens if 5 years if rates go up and I am now paying 7% (or higher) and probably PMI (depending on value of house). House is in Northern VA.
Thanks for any help. Anything I need/should ask for in the contract?
I am assuming my concerns will be what happens if 5 years if rates go up and I am now paying 7% (or higher) and probably PMI (depending on value of house). House is in Northern VA.
Thanks for any help. Anything I need/should ask for in the contract?
if anyone here can predict what the mortgage market will be in 5 years, i will bow down to that person. we cannot predict that we will even be here then...there's no way to predict what you'll be looking at then except by looking at the past and trying to read into that as far as how things will perform.
shoot...we don't know if dow jones will be 0 or 2000 come january 2010.
shoot...we don't know if dow jones will be 0 or 2000 come january 2010.
What the rate is in five years is one concern.
Another concern:
Is this a balloon mortgage where you must finance or sell in five years?
If it is an adjustable mortgage you just have to worry about the new rate. If it is a balloon you have to worry about new rate with a new mortgage or, if you can not get a new mortgage due to credit scores or loss of income at that time or ?????, can the seller, holder of the note foreclose because the loan balloons--is due in full---after five years.
Another concern:
Is this a balloon mortgage where you must finance or sell in five years?
If it is an adjustable mortgage you just have to worry about the new rate. If it is a balloon you have to worry about new rate with a new mortgage or, if you can not get a new mortgage due to credit scores or loss of income at that time or ?????, can the seller, holder of the note foreclose because the loan balloons--is due in full---after five years.
good point, however, given that hannibal99 has 28K worth of cash to put down as a deposit, i'm guessing he will have decent credit history.
as a aside note, hannibal99: If you have other high interest debt such as credit cards etc, you might be wise to use some of that cash to pay them off first and put less of a deposit on the property.
as a aside note, hannibal99: If you have other high interest debt such as credit cards etc, you might be wise to use some of that cash to pay them off first and put less of a deposit on the property.
