2005 was the first year Ford put the 4.0l SOHC in the mustang. I generally stay away any 1st year vehicles. The 4.0l SOHC is also known for having timing chain issues, it has more complex setup than other SOHC engines ford made. Also since it is a first year, it is more likely to have problems, like with the timing chains. 

However, people do like to build the 4.0, so it is not a horrid motor. If the dealer has documentation of timing chain replacement, that would make me feel better about it.

The Honda will be more reliable. But nobody can say for sure if either will last the test of time.

The 4.0L is a solid motor. Just make sure the proper maintenance has been done and it should be fine. But have a mechanic check either one out before you buy.

Have these cars been given a once over? How do you know they ain't junk if they haven't been looked at? Price is always negotiable, damage is not. Honda is going to be more reliable. If you are getting the mustang just for fun, you can, but it's the V6 so you are not really getting the mustang experience.