So my wife and I are in need of some advice.
My father just let us know that he will be retiring in the first half of 2018. My mother is already retired. So, when he finally walks away from his job, they are moving into their retirement home in the mountains of Colorado. As they've laid the groundwork for their plan, my wife and I have let them know that we may be interested in buying their house when they are ready to sell. Well, they plan on selling the moment my father retires, so we have to make a decision.
We expect to have around $20,000 put aside for the down payment by the time my dad retires. We also will have about $15,000 available to us (if necessary) by borrowing against a 401k and IRA (although I really don't want to do this). The house in question currently shows up on Zillow at $350,000. In the booming front range, the value has gone up nearly $100,000 in three years and is expected to continue as the front range explodes. My parents keep talking about giving us a "gift of equity" if we want to buy the house, but I am unclear of how that works. But the main idea seems to be that, since they will save 6% by not having an agent, they are willing to gift us that amount (in equity)--which could make a huge difference on the down payment.
My wife and I believe we can afford it. We are in our late 20s and combine for just over $100,000. Outstanding student loans and auto loans add up to about $350/month. No kids (yet). We are pretty extreme budgeters so there's no much else that isn't necessary other than Netflix and MoviePasses. I had hoped to put off buying for a couple years so we could have a better downpayment...but prices are booming, interest rates are low, and this is a huge discount on a beautiful home.
I'm looking for advice on several fronts:
First, does anyone have experience with buying without an agent? How did it go?
Second, does anyone know how "gifts of equity" work? Can I apply it to the down payment or will it just a discount on the principal?
Lastly (and probably most complicated), I become eligible for promotion in 2018. A promotion would be a $13,000 immediate pay bump and huge perks down the line. But to be a likely candidate for promotions, I have to be willing to move (which we are). We are well aware that it is not usually worth it to buy a house and resell it within months or even a couple years. Is this a wash if we are getting the house at a discount anyway? If I get a promotion elsewhere, what are the major things to consider if we decide to rent out the house instead of sell it when we move?
It's a lot of questions, but I appreciate any input. Thank you in advance.
EDIT: A few more thinks after some of the comments. My wife works at a bank that will wave a large amount of the closing costs. So we are good on both closing costs and emergency fund money. Also, we have been told by her bank that so long as the gift of equity plus out down payment get above 10%, they would forego PMI (which is huge and I should have mentioned earlier...but we are still not 100% on). But, we have no intention on getting anywhere close to 20% down. That being said, we absolutely can afford the monthly mortgage payments (my calulations have it somewhere around $1700/month without any PMI.
Submitted September 15, 2017 at 08:13PM by matt0x http://ift.tt/2ydt8Kn
