A little background: I'm 26-years-old and I have lived in my current house for the last ~17 years. When I was around 17-years-old, my mother began dating a man and eventually moved in with him. She resided with him for the past ~8 years until recently when their relationship ended. During that time, the deed and mortgage was in my mother's name and she continued paying the mortgage payment while I paid for utilities. Since she is no longer living with her boyfriend, she wants to buy a new house. She does not want to live in this house and said it would be difficult for her to afford living here alone. In order for her to purchase a new house, I would need to buy this house from her. This is something she wants to do relatively quickly- probably within the next month or two.
My mother bought this house in 2002 for $129,000. It is probably the nicest house in the neighborhood and, last year, the house next door sold for $156,000. We estimated that this house was worth ~$170,000, but yesterday I spoke with a real estate agent who looked on a website for agents and said that it's worth closer to $191,000. There is ~$100,000 left on the current mortgage. My mother said that she will sell me this house for $150,000 and later gift me $20,000 leaving her with $30,000 for a down payment on a new house.
I work for a major city police department. The police foundation has a housing incentive program to get officers to move into the city. They are building houses for ~$155,000, selling it to the officer at cost, and giving the officer a $500/month stipend for 5 years. The houses are two-story, 3 bedroom/ 2 bath, have a two-car-rear-loading garage, over 2,000 square feet, and include appliances. The houses are worth $200,000+ so I would immediately have ~$45,000+ of equity in the house. Much older and smaller houses in that area of the city are already selling for $260,000+. As the area develops and improves over the next few years the value will very likely increase to $300,000+. The foundation also offers down payment assistance. Property values in the city are already insane and to be able to get any house for this price, let alone a newly constructed 2,000+ square foot house, is unheard of. The only catch is that the houses are in high-crime areas that they are trying to gentrify.
My plan, if accepted into the program, is to rent out the house I'm currently in and move into the house in the city. Houses in my area are renting for $1,400-1,700. Property values around here are rising and it's an asset I'd like to retain if practical. Getting a house in the city through this program also seems like too good of an opportunity to pass up. So, this means I would be getting a $150,000 mortgage within the next two months and, if accepted into the program, another $155,000 mortgage within the next six months to a year.
The only debts I have are a $7,800 motorcycle loan ($297/month) and $7,700 in student loans ($150/month). The only other major monthly expense is insurance for my car and motorcycle ($250/month). I have ~$20,000 liquid and ~$64,000 in investments. My credit score is 801 and last year I grossed ~$93,000 including overtime and part-time jobs. We also just received a $10,000 raise at work.
Edit: Within five years I will be making $20,000 more per year on my base salary if I stay my current rank. There is a decent chance of me getting promoted this year which would come with an $8,500/year increase. Next year, there is a very good chance I will make sergeant giving me a $30,000/year increase.
Submitted February 24, 2019 at 07:56AM by FinancialInquiry https://ift.tt/2tCJRpw
