- 5 years ago
We FINALLY made it to the escrow phase of a home (we were not getting past writing offers) after switching our real estate agent and lender (idk if that made a difference, or it was just timing). I feel like I need someone to talk to.
The first decision we have to make right now is whether we we want to hire an inspector or not. This is a brand-new manufactured home, made to look like a house, and it was just installed this year with no one living in it. It’s set on it’s own land (we will own the land), has a pit set foundation, etc. The people selling it are actually the company owners of a local office that sells custom manufactured homes; they purchased the land with an old home, and replaced it with this one. This home has a 7 year warranty. *It includes a structural warrantly, and warranty on built-in appliances, plumbing system (pipes, vents, connections, joints, toilets, sinks, water lines), electrical system (wiring, service panel, receptacles, fans, boxes, switches, fuses & circuit breakers, outlets), central air conditioning system, and on the central heating system.
Anyways, my fiance and I keep going back and forth about the inspector. It’s going to be approximetly $350. I don’t want to sound like we’re cheap, but every little amount is adding up. We can afford it, but I don’t want it to feel like a “waste”. If this wasn’t a brand new home I wouldn’t even question the need of an inspector, but in this scenario is it even necessary? I know that when they were getting permits for building, the county inspector went to check everything. I don’t know how thurough it was, but I imagine they got the most important things. Since this is a multi-wide manufactured home, it was built at the Silvercret factory, but then transported in 2 pieces and set-up again on location on the property. Any words of wisdom in this case? Has anyone purchased a new home and still had an inspector check it out? Do you regret it? Has anyone encountered any problems in a new home?
I personally would not want to spend the $350 on the inspector if we will be buying points and paying closing costs. We have enough to cover all of that, but I want to make sure we’re being responsible with every bit of money and only doing what is really in our best interest and necessary. Fiance says we should get an inspector.
The second decision we have to make is whether we want to purchase points for the loan interest rate or not. It is something we are highly considering, and leaning towards “yes” just because it sounds like a good deal. But how does one know when it’s right or not? Are there any reasons to be against it? How does one weigh out the odds of whether it is worth it or not? This is what we are being offered:
A) 3.875% is free, and it will lead to a mortgage payment of $2,064 including taxes and home insurance (PMI is in the interest rate).
B) 3.625% requires $866 payment, and our mortgage will be at $2,015.
C) 3.500% requires $1,732, with a mortgage of $1,990.
The difference between scenario A and C is that C will have a mortgage of $74 a month less than A. In order to start seeing the savings, we would have to make 23 mortgage payments (almost 2 years) to make up for the $1,732 spent on points. Isn’t this a significantly positive thing since we plan to live here for at least 10 years?
However, I think that with the 3.875%, the lender would cover our closings costs ($3,000), so we would basically be receiving points. I think that with us buying points, we would on top of that also have to cover the closings costs ourselves. So if I combined the $1,732 point fee with the closing costs, it would take 5 years of payments to break even. So much math my brain hurts. What option makes the most sense here??
I just want to make sure I don’t have tunnel vision, and that I am seeing all sides of this with pros and cons. Initially our lender did not even talk about the points, and he said the 3.875% option (with them paying closing) would be the best for us. His assistant is the one that mentioned points and said he thinks the 3.625% option is the best deal for us.
P.s. By the way, is it normal that we’re going on the 7th day of escrow and we have not received a GFE from the lender, or any other forms/applications asside from the initial application for the pre-approval?
And now this is where some of you may fall off of your chair or think that we are crazy, and I honestly don’t know if we are. So I want someone to tell me if we are. This manufactured home is $385,000 (they wanted $3,999k, we offered $375k, settled on $385k). There was nothing to compare it to, because this is the only brand new manufactured home in the area, so it’s the only one with this price tag. The closest any have gotten is one that recently sold for $309k, but it was sold “as is” and was 10+ years older, in a less desirable neighborhood. Now, our plan was to get to the appraisal part of the escrow, because that’s the only way we will know who is “crazy” here. Since there is nothing comparable to it anywhere in the area, the lender is taking into consideration the seller’s receipts of what they spent on the new home and replacement fees etc. At first they thought it would probably appraise at $350k so then we would try to have them compromise with us on the price. Now they’re thinking it is possible it can appraise at $370k or closer to $380k. We shouldn’t feel bad about purchasing it at that price IF it does appraise at that, right?? Because we are willing to if it does appraise, but I just really hope it’s not a mistake and we’re being naive about this. The appraisal report will not be available until about 1 week from tommorrow.
These are just extra details that may address concerns some may have:
Renting is not an option for us, so “taking a break” from buying like some have suggested can’t happen. We have been trying to buy since February, but the competition is tough, so we’re not about to give up now on owning a home as long as we’re not being unreasonable about it. The above mortgage payments for that home price is something that fits comfortably within our budget. I already included all of our expenses on a spreadsheet, and we will not be living paycheck to paychek with that mortgage. But of course, the more we have extra monthly the better, so a cheaper house is desirable, but I feel that maybe the fact that this is a brand new home and in a super safe neighborhood makes up for it.