Financing

[Bryan]

Hi all,
A friend of mine is getting ready to go to the bank....I know there are alot of variables...but see if this sounds right.

The final price of the home after land improvements ( by the way, he was able to get 2 acres of land for 22K, the amount on the worksheet from the dealer was estimated at 30K for ONE acre), anyway, the final amount to be fiananced is $107,000, he is paying $3,600 down, and is using an FHA lender. His payments are going to be $825.00 incl escrow...does this sound right?

[Bryan]

oops,

The $107,000 financed amount is after the downpayment....so a total of 107K financed...thanks

[rmurray]

Sounds like a good deal to me..

[Jon]

Bryan:
If you are asking whether the amount of his monthly payment is reasonable, it would be necessary to know the term of the loan--among other things. Still, given the amount of the downpayment and assuming the loan term is no longer than 20 to 25 years with an escrow that includes property taxes and property insurance, $825 sounds good indeed.

[Bryan]

30 years on the term. That payment amount includes escrow property and taxes.

[rmurray]

What is the rate....Actually sounds a little low...It is impossible for any of us to have any idea what the escrow is...How much is the principle and interest part of the payment?

[Bryan]

Rate is 6.5 on a total of 107K finanaced......also one other question, we're not sure what land goes for in that area....but as I said he bought the land, 2 acre lot unimproved, but has perked, for 22K, if you go 15 miles to the south you cannot find 1 acre of land for under 20K per...does it make sense that there would be instant equity in the land? The land is sitting back on a private drive that he put down (asphalt) and the state has agreed to maintain it....so it will be a state maintained drive leading to the property.

[rmurray]

Sorry about the delay with a reply....If the principle is 107K...The house p[ayment is $ 676.31 plus insurance and tax escrow AND FHA insurance fee...

The FHA insurance will be about $ 55..That leaves only $ 94/mo for the tax and insurance escrow...candily that sounds a little low...That is extimating both insurance and taxes at only $ 1,128/yr...If that is correct...The payment quoted is ok...If that is low the final payment will be a little higher......Tell you friend to go for it if he is happy...