Originally Posted by 1stimestar
Financing. So Monday we are writing an offer on a house. I only have about $2000 down so we are offering a balloon payment in 8 years in hopes of inticing them to sell to a dedicated buyer. In 8 years we will have made enough improvements on the place (that really NEEDS improvements) that hopefully we can then get bank financing.
Can you tell me a bit about what financing options you all are using? How much down did you have? What are your terms? And if you care to tell, how much was your house?
We ended up using our VA home loan to help get our house.
We did straight up "conventional" financing through a bank. We used a combination of VA home loan plus my DH's disability through the military and the Alaskan First Time Home buyers incentives to pay no money down. We got 6.25% Fixed Rate and our house was $249,900. We made an offer for the exact amount they were asking (as we knew the house was worth about $20,000 more) and we also asked that the seller pay all closing costs.
The seller accepted our offer in 48 hours and we closed it in 3 weeks.
If you can get a bank loan now, they have fantastic rates! We thought we had a low rate back in Sept, never dreaming they would continue to plummet down to in the 4%'s. But I also know that most banks don't like to carry 'creative loans".
We were in a really good place (in our lives and in our job) to buy a home and we got lucky. We had an awesome realtor who hooked us up with a great lender at Alaska USA FCU.
We have tried to buy doing "owner financing" in Fairbanks and Delta Junction before. Our worst expericne was in Fairbanks. We found a great piece of property, it has a 2 bedroom log house, a 2 bedroom stick built house, a couple of 1/2 done cabins and dry efficiency homes as well as 2 smaller unattached garages, all on 2 acres about 5 miles down Chena Pump road. Really great location. We were friends with the owner and we thought he was a nice guy.
We got suckered into paying $2000 a month lease to own/ with owner financing at 8% for 12 years. Total of 20 years. The total asking price was $250,000. There was a TON of work needing to be done on the whole place to make things livable for a family with kids. However, the log house was a rental and rented out at $750 a month. That money was ours since we were buying the property. We also managed to fix up one other 1 bedroom place to rent out at $400 a month. Our money to keep as well.
Our down payment of $20,000 was structured to be paid out at $5000 at 6 months and $15,000 at 12 months. Then we would sign official papers to buy the place, still owner financed. We also had to get insurance on the property and pay the taxes each year, not included in the monthly payment. We never did get insurance on the property since it was uninsurable and it took that full year to make it "insurable"
Anyway, the owner kinda had a freak out, we seriously think he was bipolar. After paying all the down payment and making monthly payments for 14 months, and fixing up the place. (probably pouring over $60,000 into the it over the year) he never did get the selling papers to us. Instead he started complaining about the improvements we were making and how it was not the way "he would have done it" etc etc.....
Ugh, it was not pretty. Lots of back and forth fighting.. Blah.
Anyway, we walked. Had to. DH got a job offer for CA the next week and we left. We lost a lot of money but we learned our lesson. Besides, money is not everything. We have our sanity!
Be very careful with owner financing. Make sure the buyers side of the contract protects you just as well as it does the buyer.