Loans Answers

Engaged couple needs advice on buying/selling

Question: Hello, everybody.

Okay, here’s my questions and ideas. Please poke holes into anything that I didn’t think out correctly.

I’m getting married April 2003 (…I gather some of you are poking holes already..). The plan right now is for my fiance to move in with me in January 2003. She is currently residing in an apartment. I am in my first house. By the time we get married, I will have been in the house for only a year. Since she and her two kids are moving in, I really need to get a bigger house, but we’re willing to wait until after the marriage before we actually move into this new house. I would like to sell the home myself (no agent) and want to purchase a used, not brand new home.

Now that I’ve explained the situation above, let me tell you the plan that I’ve come up with so far and see what you guys think:

* Instead of her moving into my house with me, wouldn’t it be a better idea for me to move in with her and we just extend her apt leasing agreement? I’m asking that because wouldn’t it be difficult to sell my current home if I’m still residing in it. Wouldn’t it become a huge nuisance to me and my family to live in a house and constantly be asked to leave whenever it’s being shown to a prospective buyer? Shouldn’t a house being sold be completely empty or is having all of my furniture and things in the house a good thing? Of course, I’m also worried about the timing of selling this house and getting a new house around the same time period.

* Since my fiance has bad credit, I’m guessing that her credit would drag down my credit rating, so I’m guessing that I would apply for a mortgage loan for my new home BEFORE we get married. If we start living together BEFORE the marriage and she supplies me money, couldn’t I report the money she gives me as “Additional source of income” on the application which would hopefully help get me (us) approved for a higher mortgage amount. For my current home, I could only get approved for $130k. My debt to income ratio is not that great. My fiance knows that her credit would hurt us when buying a new house and has no problem with the things I’m mentioning in this paragraph. I don’t know if I’ll be able to do the same routine if we’re already married. Again, I’m trying to come up with a way to do this which would include her good salary, but not her bad credit (chp 7 – bankruptcy 2 yrs ago).

* My loan is a FHA assumable loan. Of course, if I sell it that way, the person must qualify for the loan. When I sell the home, I want my name completely off the mortgage. Here’s my question though. Does my selling the home FHA assumable make it more attractive to the homebuying public or would it only really be attractive if it was non-qualifying? Also, with me selling it this way, does it make it easier for me to sell the house without having to get an agent? With a wedding coming up, of course, I would like to avoid the 6% commission if possible. I spoke to two other people who did FSBO and they said that it was a total nightmare and if they had to do it over, they would have hired an agent. I’m just wondering if offering a FHA assumable makes life easier for me or not.

* Any book recommendations????

Thanks everyone. I’m asking you guys all of these questions because my fiance says that I’m aggravating her and I should be focusing on our marriage, not all this future home stuff. Maybe your answers will help me relax a little

Answer: Congratulations on your upcoming wedding… Been married (with kids) 10 years this Aug – just keeps getting better.

I’ll do my best to answer your questions.

First, if you move in with your fiancee, you’ll be paying rent and a mortgage. If you’re worried about credit this will not help your debt-income ratio. Also, selling your home and renting will not provide you with any tax benefits. I would say that you would be far better off living in your home rather than renting, but you may want to consider consulting with a financial planner.

As for selling a completely empty home, there are pros and cons. Pro, easy for a buyer to see themselves in it, however not all people are strong forward thinkers and would rather see a home that is furnished. Con (and this can become pretty major), since the house is empty the perception tends to be – how long has this house been vacant and on the market and what’s wrong with it if it’s been on the market if it’s taking so long to sell.

However, keep in mind that every home will sell to the right buyer given the *terms and price* regardless of being vacant or not. I think the bigger issue is one of financial planning.

** Shameless Plug ** As for selling FSBO, I honestly think there is no other way. I operate a FSBO Web site (www.propertysites.com) and everyone that has sold a home FSBO through our service has indicated that they would do it again in a heart beat.

Selling property yourself is not difficult, most people have a hard time or *nightmare* because they are uninformed about the process. It isn’t rocket science and realtors don’t need college degrees (not a dig, just a fact). The biggest issue is understanding the process, everything is boilerplate, we discuss this on our site.

As for your assumable mortgage, this can be attractive if your APR is lower than the current rates. It certainly would be a plus for some buyers, remember *terms and price* when negotiating the sale. Good Luck, and I hope you find the information helpful.

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