No. of Recommendations: 1 husband's job is renewed annually.
...The company seems to be doing well at the moment, but you never know, especially these days.

I don't think you should buy. Too risky right now.

... purchased it May 2005,
...prices were dropping. The neighborhood seems to have leveled out a bit, but still below the 2005-2007 median.

So the house is now worth less than what your landlord paid. Sounds like he's gotten tired of waiting for prices to rise, and is hoping to unload it for the amount of the mortgage.

1. The house is worth less than his mortgage. If you do decide to buy, do your due diligence to establish FMV, and don't offer more than that, regardless of what the seller needs to pay off his mortgage. Actually, if the seller's underwater and doesn't have cash to bring to the table, the sale can't happen anyway, because no one will approve a loan for you for higher than the appraisal.
2. Landlord made a huge down payment in 2005 (or aggressively paid down the mortgage), so house is now worth more than the mortgage. That means if you buy it for FMV, you get a fair price, and landlord can unload the house without having to bring cash to the table. He might even walk away with cash, although after paying closing costs (which he'd have to, since you can't), he might walk away empty-handed; but if he's tired of being a long-distance landlord, he might be happy with that. So, win-win.
3. #1 and #2 don't really matter, because in order to commit to a mortgage you should have either an extremely secure income source and/or significant savings to tide you over in case of job loss. You have neither.

Honestly, it sounds like your landlord has a bit of a problem, which is unfortunate, but you're not in a position to bail him out. Don't let his problem become your problem.
Print the post  


Useful Resources
Our Home Center has all you need to make buying and owning a home a great experience. Get or refinance a mortgage and much more!
Buying/Selling a Home FAQ

Mortgage Professor
Offsite resource for mortgage questions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.