Advice for a friend whom is a first time homebuyer

Advice for a friend whom is a first time homebuyer

Homeowner · Troy, AL · Member since 2013 · 6 posts · 0 votes
I have a friend that is potentially about to have a lien placed on him. He's in the process of buying a home everything is with the underwriter currently. According to his wife's figures the property will be 4 times what they make, they are only putting down 3%, they have a 1 year old child with another on the way, the realtor is also the owner of the property, they forwent an inspection cause they couldn't afford it, and they are currently without a car needing to buy a new one. I've spoken with them but they get all emotional and think I'm trying to ruin their happiness. I am asking advice about the situation basically to show my friend what others would say about the purchase of this home. So the question is would this home be a good investment?
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  • Joel OwensBusiness Member
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    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    13y

    No way to tell.

    What is the market value of the property today versus what they are paying??

    If they can't pay a few hundred bucks for inspection they really do not need to be buying this house. Sounds like they are struggling to stay above water now without adding a big house mortgage onto the situation.

    I do not know about 3% as the lowest is usually FHA at 3.5% down but you can't get rid of mortgage insurance for the life of the loan now adding huge costs over the years to the total payoff of the loan.

    Sadly people want what they want and give no thought to ramifications down the road.

    Ultimately as a friend you tell them your thoughts and then need to drop it. It's their life and their choice to make. I have friends where I tell them what I think and let it go. They still do what they think is best and later have to live with the consequences.

    I just enjoy my limited time around them so their actions do not influence my life.

    No legal advice.

  • Homeowner · Troy, AL · Member since 2013 · 6 posts · 0 votes
    13y

    Thank you Joel. Im going to take your advice cause I'm tired of racking my brain about it. I've got my own investments to be taking care of. Thanks man.

  • Residential Loan Broker · Santa Rosa, CA · Member since 2013 · 184 posts · 36 votes
    13y

    "Ultimately as a friend you tell them your thoughts and then need to drop it. It's their life and their choice to make. I have friends where I tell them what I think and let it go. They still do what they think is best and later have to live with the consequences"

    I agree with this. Well said.

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