Buying a house, loans and (gulp) selling my car? Please give some advice.

[SlimeGold 69 15]

We are thinking of selling our house and moving. We have owned our house for about 7 years and we plan on selling. Anybody been thru this recently? Did you sell your house first and then look or what? To be honest, I'm not sure how to go about it. The bigest fear/problem is the down payment for a new loan. I hear that 10% down of the selling price is the norm. So if we find something for $100,000, will we need 10 grand in cash for a down payment? As a last resort I would consider selling my car but I don't want to do that if at all possible. I plan on talking to local banks but I would like to be armed with a little bit of knowledge before I go in. We have perfect credit and we only owe for our house and have no other payments other than the usual monthly bills ( no credit card or car payments). We used Fanny Mae loan with our first home plus we got a great deal on it from a family friend, so the down payment was not bad at the time. Are the Fanny Mae loans still a option? Any sugestions or tells of your experiences would be helpful. Thanks.

[Pakrat 1,043]

Great time to buy, bad time to sell. I can't believe there are houses for 100k in VA, that is amazing!!!! My 3 bedroom 1.5 bath fixer upper on 1/3 acre in NH cost me more than double that 8 years ago. If you don't have 10% down then you can always put down what you can and get PMI for a short period, then when you have the funds to dump on it and get 10% vested you can drop the PMI. If you aren't moving far away and can stand to have some occasional inconvenience then the best option would be to rent or lease your current house. I'm sure you can get your monthly mortgage payment and maybe some extra for the rent and since you have been there for seven years and got it for a deal then surely you are well vested and can use that against the cost of your new home for now. This way when the market corrects in a few years you'll have bought the new house low and can now sell the old house high, best yet, keep the stang as well.

[SlimeGold 69 15]

Thanks for the advice. I will check into the PMI and basicly that's how the Fanny loan worked(I think)-you finance a big chunk of the down payment in with the mortage and pay a extra mortage insurance for a few years until the down payment is covered. BTW, There are plenty of very decent homes around the 100,000 price range here, most with nice amounts of land, but keep in mind this part of VA is very rural.

[ForceFed70 14]

I'm in the same boat. Looking to buy a new home, we've owned this house for 5 years now.

 

With the economy the way it is, I would consider renting out your old home instead of selling it. That way you could wait out the market and sell your home at a better price in a few years time. Do some research on what the rental market is like in your area, and wether you can afford to go this route. For me, it looks like I can have the old house basically "pay for itself" if rented out (Mortgage, taxes, insurance, etc).

 

You certainly want to get the 10% down. There are other options, but they will cost you money or the bank won't lend you the amount you want. Banks arn't lending a lot of money right now, there's a lot of risk and the mortgage rate is so low that they don't make much money for the risk. If you are planning to sell your current home, why are you worried about down payment? You don't think the money generated from the sale of your home will amount to a 10% down payment on the new home?

 

My last piece of advice is to tell you not to over-extend yourself. You never know what's going to happen and interest rates are going to go up at some point.

 

Here's a neat scenario:

Paying off 2 x 200,000 mortgages (buying a 200,000 house, paying off the mortgage, then selling and buying a 400,000 house). With a 2000/month payment and 4.5% interest rate it would take approx 21 years to pay off the mortgage and own your 400,000 home outright.

 

If buying a 400,000 house/mortgage right away and paying 2000/month at 4.5% it would take 31 years to pay off the mortgage and own your 400,000 home outright.

 

In both scenario's, you end up with a 400,000 home. It's just that in the 1st scenario you end up paying off the mortgage a full 10 years sooner!

[railblazer82 10]

Dont sell the car!!! It took me Seven years to get another one!! Worst seven years of my life!!!!! Hindsight proved that i really didnt have to!!

[Topless69GT 28]

I am a Mortgage Originator and did not read the post fully but FHA loans are the best deal right now for lowest down payment and least hassle. They do have max loan limits that vary by county but $100,000 is well below those limits. FHA requires 3.5% down and the down payment can be a gift, personal loan, or your own money. Get a good realtor that can help you negotiate the deal correctly. Offer a little more for the home and have the seller pay up to 2% or 3% towards your closing costs instead of trying to get the rock bottom price without them paying your closing costs. It will reduce your out of pocket cash to close. If you have any questions please feel free to PM me or post them.

 

Lenders right now don't like it when you rent out your current home without having previous land lord experience of 2 years. You basically will not be able to count the rent towards your existing home to help you qualify. You use to be able to but not anymore. So you would have to qualify using both your old house payment and the new home. Renting your exisiting home and buying a new one is a very risky situation. I have seen a lot of folks damage their credit or get foreclosed on doing exactly that situation. I would not do unless you can make both house payments without rental income coming in for an extended period of time. Do not count on rental income to help you out because the minute you do the house will go unrented or your renter will leave. I won't even go into maintenance problems or damage that renters cause. This scenario ends in disaster far more than it is successful. If it were this easy everyone would do it.

Edited March 28, 2009 by Topless69GT

[SlimeGold 69 15]

Dont sell the car!!! It took me Seven years to get another one!! Worst seven years of my life!!!!! Hindsight proved that i really didnt have to!!

 

 

LOL... Yea, that's what I fear would hapen to me. Believe me, I don't want to sell my car if at all posible.

 

 

Thanks for the great advice Force and Topless.. I probably will be asking more questions. Looks like I have more options than I originaly thought. I don't think I would rent my house. I have seen what hapens to rented houses around here and I would go in the hole on repair cost. I think the best option would be to sell our current home and rent a place for a while. I'm sure we will make some money on it even with the current housing market.

Edited March 29, 2009 by SlimeGold 69

[Truck 12]

Any sugestions or tells of your experiences would be helpful. Thanks.

 

The key is to go to your financial institution, and get pre-approved for a certain amount. Then you can shop with some security about what you can afford. Selling your home may be the bitter part. I've had friends move this year, and not be able to buy because they can't sell the old one. So it's apartment living, for now.

 

Remember, what you're trying to do is like, two or three different phases, so make sure you take care of the details all around.

[ausstang 10]

I would be selling my existing property first, it's all relevant the loss you may take will be offset by the great deal you will be able to negotiate on your new home. You may come across someone who has put a down payment on thier next home & really needs to sell thier existing home.If you have time on your side why rush.Take one step @ a time. Being a land lord sux, people don't pay rent etc & you end up loosing everything anyway.Only go down this road if you can afford too. Maintaining 2 properties is twice as expensive.

If you don't want to sell your car don't, you will be sorry, what seems like a solution today turns out to be mistake later.

One last thing , remember it's your money. No matter who loans it, YOU have to pay it back.So make sure you get the best bang for YOUR buck.

Just my 2 cents worth.

Cheers Vic.

[Koby 10]

Do your best to keep the car but feel free to contact me if you need to sell her. I'm sure you will get a bunch of us in line to buy her.

[bnickel 10,004]

Do your best to keep the car but feel free to contact me if you need to sell her. I'm sure you will get a bunch of us in line to buy her.

 

 

if you're serious about buying another 69 mine is still for sale. let me know if interested

[Pakrat 1,043]

One other option to buy more time too is you can list your house for sale contingent upon your securing a new residence first. So if you line up a seller and do complete a deal it puts the burden of securing a temporary apartment on them instead of you. Unfortunately it's a little harder to line up a buyer that way when the market is soft but it's not an uncommon practice. My wife and I almost sat in wait mode for a house like that in our neighborhood and we ended up going for the cheaper one that needed work thankfully because the owners of the house never did find another one and took theirs off the market and built an additon instead so we would have waited for nothing.