Reply Hey Mom! Learn more about the Gerber Life Insurance Grow-Up Plan!
 
Thread Tools Display Modes
Old 02-19-2013, 09:56 PM   #1
MandeeTheGreat's Avatar
MandeeTheGreat
Registered Users
seller
seller
 
Join Date: Apr 2011
Location: Central Illinois
Posts: 649
My Mood:
Buying a fixer house with cash vs Buying move in ready with mortgage ??

If you had the ability to buy a house outright with cash would you?
We currently live in a mobile home and hate it. I hate that its not a "real" house (crappy walls, fake finishes, etc) and the park we are in is awful. The managment keeps getting sued for harrasment, there are drug dealers and theifs and people keep burning down their homes for the insurance money. Anyway we got a small inheritence when my dh's aunt passed away and we paid off our mobile home. We do have to pay a lot rent every month and taxes but its very low. We tried to get preapproved for a mortgage and were going to use the money we got from selling the mobile home as downpayment and got rejected becuase I have no credit history. No debt, no credit cards, no student loans etc. They told me.to try to get a very small limit credit card and make payments to build credit and we should be able to get a mortgage in 6 months or so. But then I really started thinking when I realized there are many decent forclosures that we could buy outright if we sold.our mobile home. We could live in it while fixing it up over time. We are not picky and just need liveable, not modern updated high end finishes. We also are thinking of buying a fixer upper multifamily home outright and living in one unit while renting out any others for extra income. (we understand that becoming landlords is a big responsibility) We then would be mortgage free AND make additional income. I just see our mobile home as money that we could buy a real house that would appreciate in value as we fixed it up. So what do you think? Is it better to be mortgage free but have a not so nice fixer upper type home or wait to get a mortgage on a nicer move in ready home? The thought of having the debt of a mortgage and paying double the cost in interest makes my stomach turn. But we could always get a mortgage if we needed or even a loan for renovations in the future. Opinions please?

Advertisement

__________________
Doula Mandee
wife to Chris mama to Ceaghan 8/15/09
ectopic angel
12/16/10 & Cesilee 12/29/11
Born Preemie @ 35 weeks, Check the Blog and shop ZULILY

MandeeTheGreat is offline   Reply With Quote
Old 02-19-2013, 11:28 PM   #2
Rdesonia's Avatar
Rdesonia
Registered Users
sitesupporter
seller
seller
 
Join Date: Feb 2011
Posts: 5,273
My Mood:
Re: Buying a fixer house with cash vs Buying move in ready with mortgage ??

I would work on your credit. You don't have to carry a balance. Just use it for gas or groceries and pay it off monthly. (I have a credit card ... It eats at my stomach to think of using it so I have yet to actually use it. As much as I hate them, it might be worth it for you to build a little credit. Also switch a few bills into your name or get added to the account like a cell phone.)
I would probably save up a down payment and buy a house with a mortgage. Your mobile home might not sell right away. What would you do if it didn't sell? Or are you planning to sell it and then rent till you find a good sale?
You could always pay off the mortgage early. (After you sell your mobile home)
__________________
Sahm married to a wonderful man who does the dishes with DS 11/18/02 and DD 7/11/11

My Come Swag with me! http://www.swagbucks.com/refer/rdesonia
Rdesonia is offline   Reply With Quote
Old 02-20-2013, 12:27 AM   #3
mrspopo
Registered Users
seller
seller
 
Join Date: Oct 2010
Posts: 2,533
Re: Buying a fixer house with cash vs Buying move in ready with mortgage ??

If I were you I would take a homebuyers class. We went to one and it was really helpful to learn some of the ins & outs. They also had some amazing tricks to quickly boost your credit. To me, good credit is incredibly important to always have. I may not ever need to use it, but when I'm ready to use it it's always there. So that might mean getting a credit card and making one small purchase each month and paying it in full each month... but doing it the old fashioned way will take years.

As far as going with a fixer-upper home, it really depends on the type of person you are. I'm a do-it-yourselfer and we weren't considering any newer homes when shopping 5 years ago. I actually knew nothing since we'd always rented, but I really really wanted to learn. And I learn well by doing. We started with one little project at a time. Simple things like putting trim around the door, and removing the baseboard heater in one room. Each time I get to something I don't know how to do, I sit and think about it and research it until I'm ready to give it a try. Within the last year I installed a 6 foot cedar fence, built a fire pit, and completely re-did the kitchen with texturing the walls, installing ikea cabinets, resurfacing the wood floors etc... It also helps that DH does all of the plumbing and electrical.

I think if you are the type of person that will take on these projects and learn and actually do them, then it could be the right decision. But I will say that it's beyond frustrating to live in a constant remodel (3 of those years we didn't even have kids!). It's depressing to look around and see just how many more projects need to happen. And it's even more frustrating that the things I want to do just aren't in the price range. I really want to replace the doors on the fireplace because they just don't work well, but budget doesn't allow it so we're stuck fixing them up.

We wanted to buy a duplex for the same reasons you mentioned. Unfortunately there was no way we would qualify since they couldn't count that future rental income.

I would hands down choose a fixer-upper to own outright. But I know way too many people that wouldn't be able to handle it. One friend had the handle break off her oven door and for over a month she's been propping a chair in front to keep it closed. She wouldn't enjoy all of the inconveniences of a fixer-upper home and just wouldn't have the know-how to deal with it.
mrspopo is offline   Reply With Quote
Old 02-20-2013, 04:31 AM   #4
pgkcb13's Avatar
pgkcb13
Registered Users
seller
seller
 
Join Date: Nov 2008
Location: Wa. State
Posts: 3,872
My Mood:
Re: Buying a fixer house with cash vs Buying move in ready with mortgage ??

I would totally do the fixer upper... but DH and I like to DIY
__________________
~Kory~
Wife to my best friend; Mama to Beetle 3/12/09, Tiny 7/22/11, and Nugget 4/5/13
CDing, BWing, BFing, ERFing, Non-Vaxing, Co-Sleeping, Crunchy, Thrifty, SAHM!
ISO Gypsum Keens in Kids size 12
pgkcb13 is offline   Reply With Quote
Old 02-20-2013, 05:34 AM   #5
ulawolf's Avatar
ulawolf
Registered Users
seller
seller
 
Join Date: Apr 2010
Location: michigan
Posts: 3,499
We have the fixer and I honestly hate it. I feel like I live in a constant state of upheaval. We bought an old farm house that was a foreclosure. I adm dreaming of the day I can sell and have an all done pretty house.
ulawolf is offline   Reply With Quote
Old 02-20-2013, 06:36 AM   #6
KaleidoscopeEyes's Avatar
KaleidoscopeEyes
Registered Users
seller
 
Join Date: Apr 2006
Location: Springfield Missouri
Posts: 14,789
My Mood:
X and I bought a fixer with cash. 1 year after moving in we split up. I probably would not have left him had he agreed to move back to a rental house.
__________________
Super crunchy, atheist, vegetarian, liberal WOH and student mama to 4 wonderful, smart homeschooling kids Wesley 16, Seth 9, Pandora Moonlilly 5 and Nevermore Stargazer 2, married to my awesome sahd artist hubby and partner to my amazing writer/techy boyfriend
KaleidoscopeEyes is offline   Reply With Quote
Old 02-20-2013, 06:49 AM   #7
briggsy13's Avatar
briggsy13
Registered Users
seller
 
Join Date: Apr 2009
Posts: 3,069
My Mood:
Re: Buying a fixer house with cash vs Buying move in ready with mortgage ??

To not have the stress of a mortgage yes I would live in rougher conditions. Think of the freedom that would mean. We feel really stuck as far as job opportunities and such because of our house and how much we owe on it and we still aren't happy with it. Its small and needs lots of upgrades that we can't afford.
I'm hoping we will win the HGTV dream house
__________________
So far I've earned $525 in Amazon Gift Cards Swagbucks
I've lost over 70 pounds, read more here. Like my FB page Get Healthy With Sara
briggsy13 is offline   Reply With Quote
Old 02-20-2013, 08:33 AM   #8
bluecandi's Avatar
bluecandi
Resident Dave Ramsey Guru
seller
 
Join Date: May 2010
Location: The South
Posts: 3,103
My Mood:
Re: Buying a fixer house with cash vs Buying move in ready with mortgage ??

I would pay cash for a house in your situation, though living in a fixer suuuuuuucks!! Ive been doing it for 5 years because dh thinks he is Handy Manny or something lol! Good luck!!!
__________________
Hi I'm Candice: mama to E, A,and B. Wifey to K. On the road to being debt free with Dave Ramsey!
bluecandi is offline   Reply With Quote
Old 02-20-2013, 08:49 AM   #9
KaleidoscopeEyes's Avatar
KaleidoscopeEyes
Registered Users
seller
 
Join Date: Apr 2006
Location: Springfield Missouri
Posts: 14,789
My Mood:
In my situation in order to buy a house cash it was a 45 min trip to my work. Between gas and increase utility cost we were not saving money living there.
__________________
Super crunchy, atheist, vegetarian, liberal WOH and student mama to 4 wonderful, smart homeschooling kids Wesley 16, Seth 9, Pandora Moonlilly 5 and Nevermore Stargazer 2, married to my awesome sahd artist hubby and partner to my amazing writer/techy boyfriend
KaleidoscopeEyes is offline   Reply With Quote
Old 02-20-2013, 08:50 AM   #10
erin_c_odonnell's Avatar
erin_c_odonnell
Registered Users
seller
 
Join Date: Jul 2008
Location: North Carolina
Posts: 3,347
My Mood:
Re: Buying a fixer house with cash vs Buying move in ready with mortgage ??

Depends on your personailty (and that of your dh). I would do the fixer cause the payed off part is just too awesome to pass up for me. Plus I like DIY and don't mind constant projects. But some people it would stress them out. I wouldn't do the multi-unit though unless you have a sizable amount towards repairs already on hand. Getting things up to code any ready to rent ALWAYS takes money even if its "move-in" ready on the sale. Everytime someone moves out/in you pretty much have to paint, change locks, fix holes, clean carpets, clean house, blahblahblah. It's a lot of money.
__________________
Erin- Helpmeet to David, Deaf. Reformed Christian. Homeschooling. SAHM to 5 on earth, 3 in eternity and currently in the family way! Edd July 2014! Grow baby grow!
erin_c_odonnell is offline   Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

Copyright 2005 - 2014 Escalate Media. All Rights Reserved.