$140 K seems alot for a first house , maybe downsize and find a reposession house or a distress sale , or owner financed house . Lots of old ladies with nice old houses are looking for a condo or apt after poppy dies . Place ad in local paper young couple seeks owner financed starter home .
I looked at a very nice distressed sale this weekend. The home was purchased 10 years ago for $190,000 and The ARM just bumped the payment to $2800/mo. The owner is selling for $71,000 because he lost his job at a local parts supplier.
Guy has already sold his 2004 Vette, 2006 Escalde, 2001 36ft Bayliner and his motorcycles.
Yeah, but you're in MI. It's very likely that the REAL value of houses has dropped a lot. It's likely he's upside down, no matter how much he's paid.
However, I agree with your basic point. Now is a good time for distressed properties.
I'm in the process of looking for a house in MI, and w/ taxes, insurance, etc. a $100k house costs about
30 yr fixed rate 5.25%
$1000/mo w/ city taxes (amounting to ~$4500/yr) $900/mo w/ township taxes (amounting to ~$3300/yr)
It also requires ~$12k of downpayment, prepayments and closing costs.
This is FHA loan w/ 3.5% down. It allows 6% concession by the seller to pay for closing costs, effectively saying that you're buying the home for $94k and financing $6k of closing costs. That still requires ~ $6k out-of-pocket at closing, plus the costs of any inspections, which are done before closing.
Note that that doesn't even get into the increased costs of utilities and home maintenance...
Karl La Follette wrote: $140 K seems alot for a first house
This depends on where you live. In my area (SE PA/Central NJ), $140K won't buy very much if you want a single family home with a garage and some level of "do what you want" freedom (although it would buy my house...).
140k will barely buy an apartment up here in British Columbia.
You neek about 500K to buy an average size, old house.
Shawn
In reply to Ian F:
Definitely agree there... My brother bought a nice middle-class ranch for over $300K a year ago in the DC/Baltimore/Annapolis triangle. The house I'm looking at is 1/3rd the cost and bigger, but it's in MI...
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