Gil Alvarez, Home Buyer in Riverside County, CA

If you are a home buyer paying cash and not an investor, is it advisable to buy a home that is approved for Homepath & Renovation Mortgage?

Asked by Gil Alvarez, Riverside County, CA Sun Oct 25, 2009

Property listed As IS and as per pest report, property has dry water stains and fungus (black substances) on ceilings and walls. Please give me your thoughts on this.

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The first answer is 100% correct so am not providing further comments on Jane's answer.

However, another perspective you should consider is ... every major purchase is an "investment". Regardless, if you see your self an "investor" or an "owner occupy". This is how one gets a head in building personal wealth over time. For every dollar you spend, you should know what is your return? For example, if you spend $1, would you rather get $1.10 or $.90 in return benefits?

While cash is king and there are many positive benefits paying for purchases with cash; however, sometimes paying all cash for certain purchases is not always the best option. For example, there is income tax benefits (lowering the homeowner income tax liabilities) for buyers who financed their home purchase. This benefit is NOT available to cash buyer.

Additionally, consider what are other investment alternatiives that may provide a "higher return" for your cash, or, could you use some of the cash to make capital improvements on the property to increase the home value over time vs. purchasing the home with all cash?

Please verify all comments noted above with a qualified tax accountant, estate planning specialist, etc.
0 votes Thank Flag Link Sun Oct 25, 2009
Gil: The homeptath program was put in place to assist home buyers who may not qualify for conventional financing. http://www.fanniemae.com/homepath/financing/index.jhtml

However, since you don't require any financing the decision should be more about the home than whether it is approved by Homepath or not.

As with any home purchase you are going to make base your decision on what the experts you hire determine the problems, potential problems and costs to repair are going to be.

Since you already know about the mold get some quotes to fix the situation. And if you are comfortable with the cost to repair the home then proceed. If the costs to repair are more than you want to spend then don't go through with the purchase.

Here is the actual verbiage from the Fannie Mae Website regarding repairs and the condition of their homes:..... the buyer should be aware that other repairs may be needed. Fannie Mae sells each property "as is," which means that the buyer accepts the property "as is." Fannie Mae is not responsible for fixing any problems after settlement.

Even if the house has fresh paint, brand new carpet, new appliances, perhaps even a new roof or siding, it doesn't mean everything in the house is new, or even works.

Fannie Mae does not warrant or guarantee any work that may have been done on the property, whether as part of its efforts to sell the home or pursuant to conditions in the purchase contract. Where a home warranty is available, you may wish to buy it at your own expense.

You should also consider hiring a qualified professional to inspect the property, whether it has been repaired or not. Hiring a home inspector is a recommended practice, no matter what type of home you buy.

Good Luck to you:

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Web Reference: http://www.soreal.biz
0 votes Thank Flag Link Sun Oct 25, 2009
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