Ok here's the situation I have facing me currently as I am looking for homes on the Northshore. I have looked at plenty of houses and narrowed my focus down to two possibilities.

One is a very nice house in a great neighborhood that is pretty much move-in ready but of course its at the top of my price range. It has been very well maintained by the previous owners and the area its in should at least hold its value over time. Its location is superior to the other house.

The other is a bank owned property that is not the typical brick and stucco look and is near the bottom of my price range. It is located in a newer neighborhood but its a less in-demand area of the northshore. The benefits to this house are of course the price, its on almost 3 times the property area and its unique style. Also, at the price I think i can get this house I can do a 15 year loan instead of a 30 so I would be gaining equity at a much faster rate than the other house. The downside to it is that it hasnt been lived in probably a year since its been in foreclosure, its needs probably 10-15k to get it into decent liveable shape.

The difference in the list prices for these two houses is about 70k. This is the conundrum i am facing. Should I take the easy,less risky but more expensive route or should I make the cheaper, more unique but more risky purchase?

Also, if someone can enlighten me as to the things I should be concerned about with a foreclosure/REO type property I would appreciate it.

2 ...

Report Post

Posted by go4lsu

Luling

Member since Aug 2006

985 posts

Posted on 4/5/10 at 12:06 pm to lsugradman

Sounds like an episode of House Hunters.

0 ...

Report Post

Posted by ProudLSUMom

Baton Rouge

Member since Sep 2007

3302 posts

Posted on 4/5/10 at 12:16 pm to lsugradman

If this were me, I would pick the move in ready house. But I am in my late 40's and don't have any children left at home. Being at the top of my price range wouldn't be difficult if money problems came about in the future.

If you are young and still raising a family (and don't have a large savings acct. balance) I would go with the cheaper home and still get a 30 year mortgage and just make extra payments. That way if you should hit any financial potholes, you are not under pressure paying back a 15 year mortgage.

Edited to add:
I am not any kind of financial guru. Just someone who has owned several houses and lived life not maxed out on credit.

This post was edited on 4/5/10 at 12:18 pm

1 ...

Report Post

Posted by lsugradman

Member since Sep 2003

8558 posts

Posted on 4/5/10 at 12:21 pm to ProudLSUMom

Thanks for the feedback. I am in my early thirties and raising a young family. One side note is that my job is pretty secure and I do have experience renovating houses. I have recently worked on a 90 yr old house close to downtown Houston and should do well on the sale of that one. So I have the capability to put in some work to fix up a house. But with a second child on the way it may be tougher to put in a similar amount of time on my next house. The thing that is tempting though is the lower price and the 15 year loan possiblity. I have thought about doing a 30 yr and paying extra but theres also the benefit of the lower rate with that 15 yr loan.

1 ...

Report Post

Posted by NC_Tigah

Carolinas

Member since Sep 2003

123945 posts

Posted on 4/5/10 at 12:36 pm to lsugradman

quote:
Thanks for the feedback. I am in my early thirties and raising a young family. One side note is that my job is pretty secure and I do have experience renovating houses. I have recently worked on a 90 yr old house close to downtown Houston and should do well on the sale of that one. So I have the capability to put in some work to fix up a house. But with a second child on the way it may be tougher to put in a similar amount of time on my next house. The thing that is tempting though is the lower price and the 15 year loan possiblity. I have thought about doing a 30 yr and paying extra but theres also the benefit of the lower rate with that 15 yr loan.

I'm sure you've done this, but look at school districts as well as kid-friendliness of the surrounding neighborhood. That could eventually impact your children a heck of a lot more than initial differences in home cost. And BTW, it's not always the most expensive home that will punch that ticket.

1 ...

Report Post

Posted by lsugradman

Member since Sep 2003

8558 posts

Posted on 4/5/10 at 1:00 pm to NC_Tigah

Schools for both houses are great. The more expensive house is in a gated community with a pool whereas the cheaper house is in your typical suburban type neighboorhood but there are young families around and alot of the houses have pools. The more expensive house is one story whereas the cheaper is two stories but has a room that would be perfect for the kids playroom. So yeah...its not a slam dunk either way. Tough decision on this one but maybe I will found out some info on the cheaper one that may eliminate as a possibility.

Page 1