New Home Buyer – repairs question
Question: I am currently buying my first house. After the home inspection, there >were several problems found (about $8,000) which the seller gave me >credit for. All of my cash on hand will be used for the down payment >(10%) and closing costs. What are my options for getting the money to >pay for the repairs. Can I get a home equity loan (I am putting down >10%) or roll the repair cost into the home mortgage? Any suggestions or >help will be appreciated.
Answer: This is just my opinion, but I would _NOT_ get yourself into a situation where you have no money left over after buying the home.
When you’re paying someone else to do repairs, it seems that the job is never as cheap as you originally budgeted for. Couple this with the fact that there are a ton of things you’ll need to buy (cleaning supplies, lawn equipment, window treatments, furniture, etc) and you may find that you’ve way over-extended yourself.
With _only_ 10% equity in the house, it’s unlikely you’d be able to get a home equity loan immediately after moving in.
When you say the seller gave you credit for these items, I assume you mean that they lowered their accepting price for the home by $8,000? You’d probably be better off having them fix some or all of the items, and adjust the price of the house up accordingly, as long as the value of the home will still be approved by the bank for the mortgage.
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Filed under: Home Equity Loan
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