- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Mortgage Question
Posted on 10/28/15 at 12:34 pm
Posted on 10/28/15 at 12:34 pm
My wife and I are starting the process to look for a house. Hoping to find something in the $100,000 to $150,000 range.
At the current moment, our understanding is that my grandparents would be agreeable to the idea of loaning us the money for the same interest rate as a standard savings account.
Here is my question. What is the average interest rate for a standard savings account? Would I actually be able to get a lower interest rate with where my credit stands? Which is right around 700. If we were to do a loan, we would try to get a USDA Rural Development loan. Which does not require anything down.
I think going through my grandparents is the best bet regardless. Just trying to get an idea of where we would be. Also, what other factors do I need to think about besides potential HOA fees, utilities, property taxes...etc.
Also of note. We just had a son, so I think they would do everything they could to get us closer to them.
We were initially looking at apts. but rental prices currently seem idiotic to pay. With our current needs, we are kind of stuck looking in the $1000 range for a 2bed/2bath 1100 sq.ft. apt or house. Not something I want to just throw money at.
At the current moment, our understanding is that my grandparents would be agreeable to the idea of loaning us the money for the same interest rate as a standard savings account.
Here is my question. What is the average interest rate for a standard savings account? Would I actually be able to get a lower interest rate with where my credit stands? Which is right around 700. If we were to do a loan, we would try to get a USDA Rural Development loan. Which does not require anything down.
I think going through my grandparents is the best bet regardless. Just trying to get an idea of where we would be. Also, what other factors do I need to think about besides potential HOA fees, utilities, property taxes...etc.
Also of note. We just had a son, so I think they would do everything they could to get us closer to them.
We were initially looking at apts. but rental prices currently seem idiotic to pay. With our current needs, we are kind of stuck looking in the $1000 range for a 2bed/2bath 1100 sq.ft. apt or house. Not something I want to just throw money at.
5
Posted on 10/28/15 at 12:39 pm to VaBamaMan
A standard savings account is < 1%. You will not find a mortgage anywhere close to that, no matter what your credit score is or what government program you use.
Take your grandparents to a nice dinner and thank them.
Take your grandparents to a nice dinner and thank them.
Posted on 10/28/15 at 12:40 pm to anc
quote:
Take your grandparents to a nice dinner once a month and thank them.
ETA: You'll save 200-400 a month on interest payments monthly on a 30 year loan.
This post was edited on 10/28/15 at 12:45 pm
Posted on 10/28/15 at 12:40 pm to VaBamaMan
Savings account interest rates are <1%. Yes you will be getting a very good deal and would obviously not get a mortgage anywhere close to that (4%ish) with a traditional mortgage. Also you won't need 20% necessarily and you won't have any closing costs.
Not familiar with USDA Rural Development Loan but I doubt it changes much.
Assuming a $200,000 mortgage you will pay $344,000 ish with a 4% and $232,000ish for 1%.
Your grandparents would be saving you more than $100,000 over 30 years and will save you about $300/month,
Not familiar with USDA Rural Development Loan but I doubt it changes much.
Assuming a $200,000 mortgage you will pay $344,000 ish with a 4% and $232,000ish for 1%.
Your grandparents would be saving you more than $100,000 over 30 years and will save you about $300/month,
This post was edited on 10/28/15 at 12:43 pm
Posted on 10/28/15 at 12:49 pm to VaBamaMan
the best savings accounts out there right now are about 1.05%.
Posted on 10/28/15 at 1:20 pm to notsince98
Thanks guys! I was under the impression they were around 3-4%
You better believe I'll show my appreciation to them if they were to do this.
Posted on 10/28/15 at 1:53 pm to yellowhammer2098
Seeing as how it would be a cash transaction as far as the purchase is concerned. Would that save us in closing costs? Would we be able to undercut a price by a fair amount because of that? Obviously every situation is different. Just wondering what ya'll think we would be able to pull off paying with cash.
Edit: Also, I'm thinking of asking them to do it at 1.5% or 2%. We can still easily afford that, and it would get them a slightly better return on value.
Just had a sad thought, they'll never see the end of a 30 year mortgage...
Edit: Also, I'm thinking of asking them to do it at 1.5% or 2%. We can still easily afford that, and it would get them a slightly better return on value.
Just had a sad thought, they'll never see the end of a 30 year mortgage...
This post was edited on 10/28/15 at 1:55 pm
Posted on 10/28/15 at 1:59 pm to VaBamaMan
Yes you will save on some closing costs. You won't have to get an appraisal and won't have to pay a bank anything. There will still be some costs like paying the closing attorney and such. Someone may be able to be more specific.
I just did this in July 2014 with my mom being the "bank" and it allowed for a much quicker and less expensive closing.
I just did this in July 2014 with my mom being the "bank" and it allowed for a much quicker and less expensive closing.
Posted on 10/28/15 at 2:00 pm to yellowhammer2098
Posted on 10/28/15 at 2:36 pm to VaBamaMan
quote:
Just had a sad thought, they'll never see the end of a 30 year mortgage...
Better make sure you have the necessary paperwork in order for when they have both passed away. If there are other relatives involved with their estate, they may not be as kind to you as your grandparents were.
Of course, I don't know your specific situation, but that is something to think about.
Posted on 10/28/15 at 3:43 pm to VaBamaMan
quote:
I'm thinking of asking them to do it at 1.5% or 2%.
What are you going to do when interest rates on savings accounts return to their normal 5% or more? Thirty years is a long time and they'll then be foregoing hundreds of dollars of income every month.
Posted on 10/28/15 at 3:50 pm to TigerRob20
(no message)
This post was edited on 1/26/16 at 12:20 pm
Posted on 10/28/15 at 3:52 pm to anc
quote:
A standard savings account is < 1%. You will not find a mortgage anywhere close to that, no matter what your credit score is or what government program you use.
Take your grandparents to a nice dinner and thank them.
Posted on 10/28/15 at 3:56 pm to Layabout
(no message)
This post was edited on 1/26/16 at 12:20 pm
Posted on 10/28/15 at 5:07 pm to VaBamaMan
Nothing to add, except to say, good luck with this. I found this to be a uplifting thread.
Posted on 10/29/15 at 10:07 am to VaBamaMan
This is really a gift from your grand parents. They are old and see this as a great way to support their grand kids (which are really more important than their own kids from what I gather 
).
Helping you out means more to them than 1% interest rate.
). Helping you out means more to them than 1% interest rate.
Posted on 10/29/15 at 3:09 pm to yellowhammer2098
quote:
I just did this in July 2014 with my mom being the "bank" and it allowed for a much quicker and less expensive closing.
Out of curiosity, how did yall structure this? Was the house put in your mom's name with some type of legal documentation showing that you were purchasing it? Or was it put in your name, with just the understanding that you were going to pay her. And if it was put in your name, were there any tax implications to this? Because I would assume that it would appear to the IRS that your mom had essentially given you a large sum of money that greatly exceeded the $13k-$14k gift limit. Anyway, just curious as to how you went about that.
Posted on 10/30/15 at 7:55 pm to sandwolf
It's a mortgage. The house is in my name. There are no tax implications that are any different than if I had gotten a mortgage from the bank.
Posted on 10/31/15 at 10:27 am to VaBamaMan
I have had several clients who had their parents/grandparents act as the bank. It's a pretty amazing gesture.
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News