If you haven't lived in the house long enough to see what the tree does yourself I'd wait and see what the tree does this year. It might not have been fungus...maybe insects which with the right chemicals you could control or elminate and the previous owner just didn't bother working on.
At any rate your going to need the growing season to see what kind of light and water the area gets before you decide what you want to replace it with if anything.

At least wait until after it flowers. We had a gorgeous one here when we moved in (house also built in the 60's- crabapples and yews must have been the trees/shrubs of choice at that time) that got some kind of disease. The heavy snow winter 2002/2003 cracked off one of the main branches and showed the rotted inside of the tree. Every spring now I miss that beautiful tree. Also, because the tree trunk was so rotted, it wouln't have made for good burning. Hope yours is healthy...