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Buying a 25,000$ House?

Author : Recie

Submitted : 2018-02-26 02:03:43    Popularity:     

Tags: Buying  House  

I don t know **** about buying a house but here s the information I ve gathered up , and I m wondering if its possible. First off I m 20, my credit score is 600. The house I m looking at costs$ 25,000 with a down payment of $5,000 and monthly mortgage

Answers:

If something costs $25,000 then you need to give the seller $25,000 (unless he agrees to give you a loan and let you pay the balance off over time.) So if you pay $5,000 up front ("down"), then you need to give them another $20,000. That is where the bank loan comes in. Down Payment + Loan = Sale Price.

As for other fees, there are fees for closing the deal including inspections, appraisals, fees associated with your loan. There are, of course, on-going fees when owning the house including insurance and taxes. The $105 loan payment pays for interest and principle (the actual amount borrowed not including interest) on the loan.

You will need to down payment plus legal/closing cost... and the $105 monthly mortgage payment is what it costs you each month in paying back the $20k mortgage you borrowed......

Amongst the other fees mentioned there is going to be Homeowners insurance costs, possibly real estate taxes (mine are about 30 percent of monthly payment not the mortgage payment. Monthly fees for electricity, gas, water, sewage, trash service (where applicable).
The 105 amount is for mortgage only so figure on at double that amount for all the other fees (less utilities) per month. However of the 105 about 10 percent goes toward the principle (25k) and 90 percent goes toward interest payments this ratio reverses as you get to the end of the loan cycle (20-25 years later).

You get a mortgage from the bank or mortgage company. Your payment goes towards the money you owe, plus the interest, depending on the lending rate for that mortgage company or bank. If you have a ten year mortgage the payments are calculated and amortised over the ten year period.
Th first thing you should do is talk to your bank or lending institution to make sure you qualify for a loan of that amount.
I can only tell you about Canadian real estate law, but I think the US is the same. When I buy a property, I make an offer on the form, subject to inspections and subject to financing. In other words, I carry out an inspection first, and also if I cannot get the financing I am not held to the sale. Once those subjects are removed, the house is mine.

To answer your questions in order:
You need a mortgage, or a bank loan to cover the $20,000. Ask your bank which works out better. The faster you can pay it down, the less interest you pay.
The $105 goes towards paying off the rest.
There are some additional costs in legal/notary fees for the legal transfer of the property title.
Also as a home owner, be prepared for unexpected costs, like plumbing and heating problems from time to time.

Generally, the only stupid questions are those not asked. If you only have $5,000 then you ARE going to need a loan because where else would the money come from? Yes, your monthly payments will go toward the $20,000 debt - a portion toward interest and a portion toward the principal. There are other costs associated with the purchase. Do you owe a realtor a portion? That's usually about 6 percent. Closing costs - not much on a $25,000 purchase. Sorry, I can't even estimate it. I haven't heard of a house that cheap in a century, well, maybe a century ago. I guess it is in a very rural area. There are always house costs. After you buy, you will need to open utility accounts and if you have not had those before, each one will likely charge you about a $300 deposit - electricity, gas, water/sewer. Garage pick up? Things that need repair/fixing in the house, landscape maintenance. It may be a good idea to get a loan for an additional $10,000. You may want to paint before you move in too. Paint is expensive these days and a gallon doesn't go far.

If you can afford only $25,000 look to renting an apartment. You will be getting nothing but problems. If you can find a finance company willing to lend money on such a risk, you pay your $5,000 at closing. The bank pays $20,000 to the seller. But you would have some closing costs, transfer taxes and escrow payments to make. You make monthly payments on the loan plus monthly payments for taxes to the bank. And you fix everything at your own expense.

House for $25,000 ? For that price I'm sure it's a money pit .Where I live you can't even buy an empty lot for so little.

You will need a bank loan or mortgage loan unless you can get owner financing. There will be closing costs, such as real estate and title fees. Those fees are often several thousand dollars too. There maybe a chance to reduce those fees substantially with owner financing. Talk to the seller and see what you can work out.



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