Help becoming a first time home buyer?

Question

am i making the right choice the thing is that the house i'm buying is 87,000 for 1300 sq feet the thing is my fha loan amount , i'm approved for is 80,000 but the seller is willing to lend me the 7,000 and i pay him back under the table over the next five years or so or if not sooner until i have payed him his money also the interest rate on the loan that i have to pay back is 197,000 including the finance charge of(119,149,00) at a rate of 7.482% also the seller is paying all of the closing cost with is 4,800 someone please help i don't want to get f#*ked being a first time home buyer

Answer 1

You already are in trouble.  You have no down payment!  You cannot afford to buy a house these days if you have no money saved up for the down payment, closing costs, reserve funds.  Are you even paying your homeowners insurance?  Some closing costs no seller ever pays -- your title ins, homeowners ins, buyer's attorney's fees (since you do not know what you are doing, you had better get a pro to read the contract and advise you properly).

How soon is "buyer's remorse" going to set in when the value of the house drops and you owe more than it is worth?  And what are you going to do when the feds come after you for making payments "under the table"?

Answer 2

No money down 100% mortgage is what you have I'm sure as the finance charge is way too much.  I think your seller has taken advantage of the fact that you are a first time buyer desperate to get on the ladder.  

But I'm not sure - If the mortgage is the best you can get and you view the property as a great deal that in 10 years time you expect the value to reach equity after all finace costs - Then go ahead>>>  5 years is my equity target for analysis/valuation purposes.

Always a good choice to get on the property ladder. Now with a slow economy property prices if you are able to meet the repayments - seem very attractive.  But you should do your research properly on the mortgage deals. I always think of prpoerty first as a commercial entity then residential.  That way you have less chance of worrying.

EDIT* As for the under the table deal - keep it there.  As what the feds dont know -  they cannot act upon it.  I say tred carefully and good luck!!

Answer 3

You will sign a paper swearing that there are no "under the table" (secret) deals between you and the seller.  You and the seller can not do your little $7,000 "deal".  You will get in trouble.  You are correct to worry.