I have an opportunity to buy my grandma house, she has it paid off and bought it new in 1966. Grandpa passed away in 1993 and the house hasn't had much updating since. In the last few years it has new roof/gutter outside paint, gas furnace and water heater interior hasn't been touched basically since. The house itself is about 1500 Sq ft with a 2 car garage and a 28×26 shop and a nice covered back patio. Interior needs a lot of updating from flooring to paint and such.
I currently have a home a few miles away that is about 1300 Sq ft with 2 car garage. The way our house is laid out we are unable to have some of the things grandma house has like a back porch the shop and a few other interior things. I have a new water heater and furnace but doesn't need much more updating.
Land size they are about the same with mine being at .289 of an acre with grandmas at 0.340
I bought my house in 2012 for 192,000 and put 20% down and have a interest rate at 3.675.
My house is now worth about 525,000 and I think grandmas house is around 450,000.
Am I stupid thinking of walking away from a 3.675 interest rate? Grandmas house would check a lot of boxes and to get those things in another house I am looking at 600,000+ houses.
Posted by mehoff636
10 Comments
Life is short. Do what makes you happy.
I think you’ve answered your own question. But I’d add – if you loved your grandmother and caring for this house would be a way to honor her, that’s something to consider too.
If you want the place , get it .
This opportunity wont come along ever again .
Plus some flipper will buy it and slap on some paint and throw down some cheap vinyl flooring and resell it for a $145k profit
If you don’t buy it you will regret it for the rest of your life. Speaking from experience.
Tough to give up a 3.6% rate. But things like layout, shop, and space are hard to replicate later.
Make sure you look at it from a pure economic standpoint. Ignore the emotional side and determine if it makes financial sense. Why would you buy this house? Why is it worth less than yours on the market? If you saw this house on the open market would you have the same response?
Once you answer it then you can determine if the sentimentality impacts your decision. Other things to consider, is your grandma giving you a discount? Does she need the money more than you? Will you have free rein to make changes or will your grandma or parents give you the guilt trip? “Don’t forget honey, your grandpa built that ugly cabinet”. “Are you going to get rid of that couch? Your mom was born on it”
Does your interest rate even matter? What do you owe, like 98k? It sounds like you have enough equity to sell your house and buy grandma’s in cash. You can then use your current mortgage payments to fund interior improvements.
Rent yours buy hers
Go for it!! This is a good opportunity for many reasons.
What’s grandma asking for the house? That’s kinda the missing piece here.
You’re right that walking away from 3.675% hurts, but if she’s giving you a family deal and you actually want the extra space/shop, the math might work out. Plus sounds like you’ve got solid equity in your current place to work with. The bigger question is whether you’re cool with taking on a renovation project – that 1966 interior is gonna need some serious work to bring it up to speed.