I’ve been researching and I’m really interested in starting to do seller financed deals. We are hoping to buy a new house and sell our current home this summer. We really, really want to move to a new house before August so that our kids will be able to attend the better schools.
Since I’m in the market for a new home and was wondering if it was a good idea to start with my own home. Here are some details:
My current house is worth 185000 – 195000 according to realtor that performed comp analysis:
139225 Principal Balance (4.375 ARM) Reaches maturity in 2042)
2500 (Lien for First Time Homebuyer Credit in 2018)
Current PITI is 1485
My plan is to refinance to a new 30 year fixed loan at about 4.3 to get a lower payment and get rid of the MIP.
New PITI would be about 1264.
Rentals around my neighborhood are in the 1400-1500 range.
If I seller finance my house I would want to at least get 190000 for the house with a 40000 down payment. If I owner finance the remaining balance of 150000 at 7% for 30 years it would make the PITI payment for the buyer to be about $1565 (1000 for P&I and 565 for escrow) a month leaving me with a monthly cash flow of about $300.
I would really need the 40000 down payment to apply towards the new house I’d like to purchase. Will refinancing my current home affect me getting another mortgage for the new house I’d like to purchase?
Do these numbers make sense? We really want to move this summer so my kids can attend better schools.