So we rent a condo in Northern Virginia for currently $1430 a month. We had a three year lease that ends at the end of this upcoming May (2021). We weren't sure whether we could continue renting or if we wanted to try to buy a condo, so we went ahead and got pre-qualified for a mortgage with our credit union. We were qualified for $260k. It is a special deal where teachers who are first time buyers still get a good interest rate (2.5%) and reduced mortgage insurance despite paying no down payment. My parents bought their townhouse with a similar no-down-payment plan before I was born and refinanced down the road when they could. I know it isn't a scam. It is a 30 year adjustable rate mortgage (we know adjustable is risky).
We have about $20k in total savings and a combined monthly take-home income of about $3300. We both have excellent credit (married couple). Our only outstanding debt is a car that will be paid off in a year. We do have a lot of regular medical bills but we have good insurance from a secure job.
Our aging landlord doesn't want to keep the property past our tenancy, and just offered to sell it to us for what she paid for it ($165k) "plus just enough to cover the cost of the paper work." I've been putting a very high estimate for what she means by that, at $10k, and been calculating things based on a $175k mortgage. We would deal with her realtor, who we we've met/worked with before and he seems great. We wouldn't hire a realtor but we'd probably be paying for an inspection and some lawyer hours to get a professional eye on the contract. We want someone with a fiduciary responsibility to us involved.
The closing costs would possibly be about $7-8k. The mortgage payment would be about $770 a month, the annual taxes about $2715. The condo association fee is $48 a month. We don't know yet what we would pay for homeowners insurance. Our utility bills would stay the same.
Recent maintenance: HVAC replaced, washer/dryer replaced, toilet replaced, fridge repaired, dryer vent cleaned, air vents sanitized. Not much maintenance was done prior to our tenancy and most of condo is as it was when it was built in the 80s.
Repairs that would likely need to be done before we sell: Re-tiling shower wall, replace stained laminate flooring from former tenants throughout condo, replace shitty old built-in microwave, replace windows and screens, replace 2 overhead fan lighting fixtures, some other small repairs.
These are repairs we would like to do for our own sake anyway.
Ideally we'd want to sell within 5 years and buy a better place. If we can.
She also offered, we think (language unclear), to let us keep renting and put our rent towards the purchase. Rent to buy. We're not sure if that's what she meant. Would that be the smarter option? But she could rescind the offer unless we get it all in a contract, and tbh she is difficult to deal with as a landlord. Pretty incompetent. We'd rather not be at her whims if we don't have to.
Any thoughts? Things we've overlooked? Things we should consider? We haven't committed to this yet and told our landlord that we'd think about it. Please ask any clarifying questions you need to!
Edited to add: It's now worth somewhere between $230k and $246k.
Another edit: While the mortgage we pre-qualified for is adjustable rate, it is different than the normal ones they offer. It can only change once every 5 years. So if we sell within 5 years, I hope I am right in thinking that the adjustable rate thing shouldn't have a big impact.
Submitted March 10, 2021 at 12:27AM by roadsidechicory https://ift.tt/3qBN5oe
