[quote author="wolvie3421" date=1232987585]
Original asking was:
$490k
$10k incentive for flooring
$25k for closing costs
I offered $480 with 20% down and they took away the $10k for flooring which is no biggie for me. I'm going with standard flooring. I was really interested in this plan 3 since each floor has it's own bedroom & bathroom, may make a good college rental later on. I toured the last 2 meriweathers (2 bed/2 bath) but weren't impressed with the living quarters being right above 3 garage doors. The long stairway from the garage to the 2nd floor living quarters was also funky.
I am a little concerned with the toxic soil issues, but then again there isn't any land to plant anything anyways so I kind of waived that off.
Oh and I guess I should mention the 3.99% 30-year fixed through UAMC. That totally sealed the deal. But then the ~$1k/month in HOA+Taxes kind of makes it a wash.
So if everything goes as planned with escrow:
Camden Plan 3
$480k
No Closing Costs
3.99% 30-year fixed
Maybe some extra plume colored hairs.</blockquote>
Congrats on your purchase. Now, I hope you don't take offense, but I am going to break down your purchase and see if the math of the lower rate works out best for you over 5 years.
$490k
$10k incentive for flooring (This was built into the price since they threw it out, and since they make 80% profit on the flooring, this was a smart choice)
$25k for closing costs (They built this into the price to cover the closing costs and your rate buy down, so you are paying for it. Please see above for proof.)
At a $480k purchase price you put down $96k
At a rate of 4% your payment for a 30 year fixed is $1833 a month.
You pay $440 a month in regular property taxes.
Approximately $440 a month in mello roos.
And $290 a month for HOA.
For a total of $3003 a month.
After five years you would have spent $180,180 and have a principal balance of $347,320.
If you knocked off the $25k in closing costs to the price, you would pay $455k, and only have to put $91k down.
At a market rate of 5.25% your payment for a 30 year fixed is $2010 a month.
You pay $417 a month in regular property taxes.
Approximately $440 a month in mello roos. (Keep in mind, mello roos never change due to the purchase price, and they are a set number every month for 30-40 years)
And $290 a month for HOA.
For a total of $2717 a month.
After five years you would have spent $163,020 and have a principal balance of $335,424.
Figure the closing costs would be about $7k for a rate of 5.25%, but you saved 5k in down payment which is now worth $6k in five years, so really it only cost you $1k more.
So lets say after 5 years the place is worth $550k. If you were to sell with the deal you currently have, you would net $22,500 (-$180+-$347,320+$550,00=$22,500)
Now, if you took the other deal and the place were worth $550k, and you were to sell it, you would net $51,576 (-$1000+-$163,020+-$335,424=$51,576) Even if you knock an additional $1k off, or even $7k you still net more $.
I'm not trying to rain on your parade, but merely show you the math. It costs a sh*t load more to finance $25k over 30 years at 4%, than it does to finance $25k less at 5.25% over 30 years. Plus, your tax break would be about the same or greater at 5.25%. Maybe you should tell them to give you the better price, it's up to you.
