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Computing interest and making an offer

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Anonymous
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Computing interest and making an offer

I have two completely unrelated questions -- and I really hope that I haven't abused everyone's patience with me!!

First, how in the &^@#$ world do you compute the interest to figure out what your payment would be? Much of my day is spent in the car (during which I see oodles of nice houses) and it would be REALLY nice if I could find a formula for figuring out what the mortgage payments would be (at 4.75%, 5%, 5.5%, etc -- just running the gamut).

While theoretically I COULD boot up my lappie and do a quick calculation on one of those mortgage calculators, it'd be much nicer if I could just do it myself with my handy calculator.

Second, we have our eye on a house that's listed for $275K (a short sale/pre-foreclosure). We managed to find out that the sellers owe roughly $175K on the loan. What would be a good number to offer?

It's really and truly worth the whole $275K, but few are buying here, so I don't think the market here will bear that. Plus, it's the biggest home in the subdivision, so I'd assume that it's real value is being affected by that. Plus, it's been modified to suit the elderly (the elderly not being common in that division). And of course, it's going to be a real bear to insure for HOI.

I guess I'm asking if there's a rule of thumb for finding a first offer, perhaps percentage-wise. Like: First offer should be X% lower than the asking price.

Those are probably issues that a realtor could help with, but we're trying to figure out as much as we can by ourselves (with ya'll's help, of course). We're terrified that a realtor will try to talk us in to "too much home" simply because DH would qualify for it (we've been told that he would qualify for $325K).

We really want to stick to the range of max $240K ($221K loan amount).

As always, thank you SO much in advance!! You guys rock!!
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Anonymous
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Re: Computing interest and making an offer

The question should be "How Much is this House worth to me?"  Although I did read an article that said the price you offer should be 13% lower than asking (I assume this means 10% less + 3% closing)

 

Good Luck!


Message Edited by 1111mel on 12-16-2008 11:05 PM
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Anonymous
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Re: Computing interest and making an offer

The question should be "How Much is this House worth to me?"  Although I did read an article that said the price you offer should be 13% lower than asking (I assume this means 10% less + 3% closing)

 

Good Luck!


Message Edited by 1111mel on 12-16-2008 11:05 PM
Message 2 of 4
Anonymous
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Re: Computing interest and making an offer


@Anonymous wrote:
The question should be "How Much is this House worth to me?"  Although I did read an article that said the price you offer should be 13% lower than asking (I assume this means 10% less + 3% closing)

 

Good Luck!


Message Edited by 1111mel on 12-16-2008 11:05 PM



To me, it's worth millions! It's perfect. It would allow us to "let" my MIL keep all of her furniture (living room, kitchen, dining, etc) from her apartment and not force us to pay for storage. It's handicap accessible, so as she (not to mention us -- since we're keeping it in mind that we *may* end up retiring in this house) gets older, it won't be difficult for her to move about (or us).

To DH, LOL, it's worth $230K. Mainly because he's pretty cheap and because he can't see paying more whatsoever (unless it was on the waterfront).

BTW, I did NOT mention the amount left on their loan to justify offering a lower offer -- I really have no idea if something like that comes into play with a short sale. Believe me, I feel *enough* like a horrible ghoul for being willing to "cash in" on someone else's misfortune. What bothers me most is the fact that *since* it's been modified for elderly or disabled care, it means not only a couple are losing their home, but probably someone who's disabled is, too.

Does that make sense? I mean, if it was a couple who just frittered away their income on furs, jewelry, trips, etc, that would be one thing (though I'd still feel horrible -- I mean, this is their HOME), but if they were caring for a disabled family member, they'd hardly be the type to fritter ... and were probably VERY conscientious and crap just happened to make it impossible for them to keep their home. Smiley Sad

Durn ... I really feel horribly guilty just being excited over the durn house. I *especially* feel guilty that I'm trying to pay so little for it. Smiley Sad
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Anonymous
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Re: Computing interest and making an offer


@Anonymous wrote:
First, how in the &^@#$ world do you compute the interest to figure out what your payment would be? Much of my day is spent in the car (during which I see oodles of nice houses) and it would be REALLY nice if I could find a formula for figuring out what the mortgage payments would be (at 4.75%, 5%, 5.5%, etc -- just running the gamut).

Here's a handy sheet - Mortgage Payment Sheet

Message 4 of 4
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