Q: I recently made an offer for a 1,150 square foot home for less than what the seller was asking. I attached a home inspection contingency. My concern is that the owner accepted the offer but noted on counter that she will not pay for any repairs and has no cash. Her broker said she is very difficult to work with.
In the cellar there is an old fuse box and a friend of mine who is electrician took a look at it and said it would cost about $1,500 to upgrade it to code. If the owner doesn’t want to give me the $1,500 or share the cost, should I go to her real estate agent to see if she’ll kick in some cash?
I don’t want to lose the home due to this.
A: You can always ask the seller to chip in to pay for needed repairs, but the seller may simply say no. That is the seller’s choice. Once you have that information, you can decide whether or not you want to buy the house “as is,” knowing you’ll have to make repairs and that some of those repairs might be costly.
In this case, if it’s true that the seller doesn’t have much money, and appears to need every cent she is going to get from this house sale, you can ask the agent to chip in a little, but the agent also has the right to turn you down. If everyone turns you down, you have to figure out how much cash you have and if you’re buying this house at a price that makes it worthwhile to upgrade the electrical and do whatever else the house needs to be liveable.
Only you know the answer to this question. I encourage you to think about whether this house is a good deal for you at this time (and the answer may be quite different for another buyer).
Q: My question deals with the good faith estimate. Could I ask the mortgage broker to work up a few different scenarios with different types of mortgages?
For instance, can I ask him to crunch the numbers for a 80/15/5 and a 80/10/10 and also see what the figures look like if I decide to pay points?
Is that too much to ask? I’m a visual person when it comes to numbers. I need to see them on paper to better understand this and make sure I am able to meet my mortgage obligations.
A: You can certainly ask your loan officer to put various scenarios in writing. But, typically good faith estimates are provided only after you apply for a loan. The lender may be happy to tell you what his or her fees will be in conjunction with several different loan types, but it may be unnecessary to ask for a good faith estimate since most of the fees (except any points) should be the same no matter what loan program you decide is right for you.
However, it concerns me that you have not taken advantage of the many online resources available to you that could help you work through the numbers yourself.
At BankRate.com, you can find out what various lenders are charging for a variety of different loans. You can also find calculators that will help you work through numbers.
Eloan.com also has an excellent amortization calculator (go to Eloan.com and at the bottom look up tools and mortgage calculators) that will help you play around with various scenarios, including if you decide to prepay your mortgage.
On my own website, ThinkGlink.com, I have a number of calculators available for you to use as well.
While any loan officer worth his or her salt would be delighted to help you do this, the only way you’ll really understand the numbers is if you crunch them yourself. So, take some time and learn how the down payment and interest rate change your payment.
You’ll be a much more knowledgeable borrower and will actually know what you’re talking about with your loan officer.
Jan. 19, 2009.