Met with the mortgage lender again today to discuss various options as far as the loan on the 1002 S. Main St. property. I get good vibes from him and he definitely understands where I’m coming from and isn’t pushy at all, but I’m getting a little frustrated, as we don’t seem to be communicating that well.
I tried to make it clear at the beginning that we could pay up to 20% down and had no real preference on how the loan was structured, as I’d likely only be holding the property for 3 months or so, and the total loan amount was so low that making some payments didn’t bother me at all. Whatever the lowest cost loan was, as far as fees and what-not, sign me up.
Somehow or other, though, that got turned into me wanting to buy points so that I could potentially sell the house in a very short time span. I did express interest in possibly going that route, depending on what the numbers looked like, as I was willing to pay a bit more upfront for the flexibility of quickly flipping it, as opposed to holding it for at least three months. But not if it increased the loan cost a great deal, as this house realistically might sit on the market for 60-90 days, given the nature of the small town real estate market here.
Everything he worked up to show me today, though, involved buying points, and all those options were too pricey as far as the loan cost at closing, in the $4K range, which seems ridiculous to me for a loan of $54,000. As I understood it, removing buying points from the equation knocks about $2K off that, so if I go the normal route and don’t buy points, I’m looking at a little under $2k in loan costs. Which isn’t great, but decent enough, especially since he can do it all in-house and speed up the process.
That means I need to hold it for 90 days, but, again, I tried to make it clear in the beginning that I wasn’t opposed to that, if it was the lowest cost option for the loan. So we ended up back at square one, as he’s now going to work up various options if I don’t buy points, etc. To be fair, I could have communicated my plans a bit clearer, and this is the first time I’ve dealt with buying points, prepayment penalties, etc.
So if we close on the 8th of March as planned, it’ll basically be the beginning of June before I can sell the place, which actually isn’t that terrible. It buys me some extra time as far as repairs go, and I’ll be able to get more done at our rental house, which we’ll likely sell later this year. There’s also approximately 9 million things left to do at our current home, too.
I have to admit that seeing the actual monthly payment on the potential loan was a surprise, as I’ve come to expect mortgage payments to be a certain amount, based on what we’ve paid in the past. But that’s always with much larger loans, so seeing that the potential monthly mortgage payment on the 1002 S. Main property would be around $400/month was a nice surprise, and opens up the possibility of renting the place, as it’d likely rent for $750-$800/month when fixed up. I really don’t want to be in the landlord business to that extent but it’s a nice option to have, if the house doesn’t move for some reason when I’m ready to sell.
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