Author Topic: Loan and Real Estate Advice Needed  (Read 1417 times)

jpink

  • 5 O'Clock Shadow
  • *
  • Posts: 1
Loan and Real Estate Advice Needed
« on: January 05, 2016, 09:39:48 AM »
I have my house on the market and judging by other sales in the area in the past 12 months, we stand to make a very decent profit (bought for $195 in 2013, comps come it at $300+ now in our historic, SE city). I put it on the market in October, but the selling season here is Spring and Summer. The MLS overall has been very quiet and we have not received any offers. Comparable homes in the area do rent for twice our mortgage, but my spouse does not feel comfortable with the idea of being a landlord, we both think it will be too stressful a job since the home is a historic property and needs frequent TLC. Many of our neighbors have gone this route however.

I have a contingency offer on a home (approx $200) that is perfect for our needs and a very good value in an area that has seen and continues to see a lot of growth in the past two years. It is just 10 minutes from our work places and is a new energy efficient home, which would greatly reduce our living costs. If we lose out on this house, we will probably have to spend at least 25-30K more to find a comparable home in the town we are relocating to- it would also probably be a resale and further from our workplaces and have a much higher HOA. This house is a new build, so the down payment will not be due for another 7 months.

Once the contingency period is over, we need to make a non-contingency offer in order to get the home. We have retirement savings, but we do not want to touch this. We do not have the finances for a 20% downpayment without taking out a loan of some kind and I do not want to significantly lower the asking price for my current home since it is fairly priced at market value already and the only reason it hasn't sold is that the market is in its slow season (have consulted various realtors to ensure this is the case.)

In general, we are a very  risk-adverse couple, 30 years old, 800+ credit score. Besides our $145,000 current mortgage, we have just under $15,000 debt from student and car loans. We make approx $82,000 per year combined. Is it financially logical to take on a bridge loan? Should we purchase the new home as a second home with a less than 10% down payment and take on a higher monthly payment and (temporarily) PMI? I also have a family member who is offering to loan us the full down payment or just co-sign on our bridge loan until we can sell our first home, but feel unsure about accepting this generous offer of assistance. Should I just forget about it and look for a more expensive home in 3-6 months when our house is (hopefully) sold? Is there another option we haven't considered?

Any advice would be much appreciated. Please let me know if further details are needed- I tried to be thorough. Thank you in advance!

honeybbq

  • Handlebar Stache
  • *****
  • Posts: 1135
  • Location: Seattle
Re: Loan and Real Estate Advice Needed
« Reply #1 on: January 05, 2016, 11:27:32 AM »
I would pull your home off the market until spring. Then reevaluate. Sounds like otherwise you'll be floating 2 mortgages til spring or even possibly summer. There will always be another house to buy.

Another Reader

  • Magnum Stache
  • ******
  • Posts: 4834
Re: Loan and Real Estate Advice Needed
« Reply #2 on: January 05, 2016, 11:30:03 AM »
When do you have to remove the contingency?

AZDude

  • Handlebar Stache
  • *****
  • Posts: 1298
Re: Loan and Real Estate Advice Needed
« Reply #3 on: January 05, 2016, 11:46:10 AM »
Can you pay two mortgages for 6+ months without significant hardship? If so, then take the loan from your family/friend, buy the house, sell the old one, and then pay back in full and pay off your debt.

Seems like a good deal. Worst case scenario, you become a reluctant landlord until it sells.