I am near the closing date on a house that I am purchasing for 45,000. I am going to use it as a rental and charge 675.00 per month and I have a renter starting Sept. 1st. I put 20 percent down and paid for closing-- the house is move-in ready and they left all appliances. I am getting a mortgage on the house. Bank called today and informed me that I owe 13,500 on day of closing-- 20 percent down plus closing cost. I was expecting closing cost to be around 2,500--Can anyone tell me where I went wrong and is this still a profitable deal? The house was appraised at 46,000--I am starting to question my decision and thinking of walking away. Thanks for the help- Dan
Look at your HUD1 statement they should have provided, you will have some 'pre-pays' in there such as insurance etc, that will drive up the cost at closing, but they are paying insurance for the next year.
Until you look at the HUD1 you won't know what your payingi for
You will be making 1 1/2% per month on your purchase price. Not bad. Why would you bail? The renter will pay your mortgage off.
Thanks for the responses... I am thinking of bailing because, I think 13500 for a 45,000 home seems high. I am new to real estate and trying hard not to make costly mistakes.
Every cost should be detailed in documents if your using a Realtor make sure he explains and goes over it with you. Let us know what the extra $4500 is for if you find out.
I almost backed out of a purchase a year ago because of a mix up and the cost of the property went up by $10k causing my down payment to increase as well. I'm glad I didn't back out of that purchase because I'm still profiting every month. In the end if you don't feel good about the deal don't go forward with it. You'll find something else
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