Submitted by drowningblue t3_yhhs8z in personalfinance
My uncle is trying to retire and wants to sell one of his houses. It's a 4 bedroom, 2 bath 1978 brick home with 2300 sqft. I would be closer to work and it would give me room to grow. It also has a small shop on it that I could use for hobbies or to run a business. He said because he is retiring and that since I'm his nephew he would sell it to me for 100k.
It needs some work, nothing major but is very livable, basically minor maintenance has been neglected for the past 10 years. It's dated inside so I would probably do some updating. Most homes in this area, around this size, in worse shape start at 250k.
So here's the kicker, I just refinanced my house last year. I got a really good rate. (3.25%) My current home is a measly 850 sqft, 2br 1 bath. (starter home), bought before Covid home prices. It was renovated before I bought it so the only major thing I replaced was the central A/C. It is very comfortable and affordable. I live in the city, close to everything. I really like my home. Since it's small, it is very easy to maintain and utilities are very low. My mortgage is so low that if I somehow lost my job I could still afford it working minimum wage. (~$500 with mortgage and escrow) So a very safe place.
In a nutshell, I am almost positive I could sell my current house and make more than enough to afford my uncle's house. (possibly with some left over to start renovations). The issue is the work that needs to be done, and current interest rates, and I would lose the very comfortable mortgage payment. If I sold my old house, used the excess as a downpayment and took out a 90k mortgage I would theoretically have roughly 10k left. My mortgage and escrow would go to around $800 being less comfortable.
I make 38k a year and live in GA. The car is paid off, and only have one personal loan that I have 4k on. (could go ahead and pay that off if I bought this house). No major debts other than that.
So is it crazy for me to turn this down?
EDIT:So I'm going to see about renting out my current house and getting a mortgage on the uncle's house. I did not know I could use the income from the rental for the debt to income calculation. With that in mind I can probably afford both if I get a good renter. I will probably finance an extra 20k to kickstart the repairs.