First time home-buyer questions

artloversplus
Mon, 06 Feb 2012 16:00:45 +0000

jmmom,

you are most likely describing a deal that was done during the gogo years of 2005-7 when the credit was loose and the banks are eager to find deals. In today’s market, it is very unlikely to have two guys came out of the collge with green in behind of their ears and pull an 800K home purchase like that. The interest is low, but the credit is hard to come by. I don’t think any “bank” will make a loan with kids without a credit history. You maybe able to find some private investor to make a loan like that with 8-10% interest and perhaps 30% down. Regardless what arrangements they made among themselfs.

I think if OP want, he can buy the house himself and rent to the kids with a lease/option to buy countract, in that, the two kids will be paying mortgages, expenses and taxes. That way, it has less impact if some one moves out and will be able get on the band wagon of appreciation.

IMHO, the housing down turn in PA/MP/MV areas is over, in a near term or longer term point of view, there is very little to lose as the price on single family home did not come down too much anyway.

btw, home prices in the Bay Area did not crash for those homes in the good school district: Cupertino, Lynbrook, Mission SJ, Palo Alto etc, not a drop even in Millbrae, which has the best school in San Mateo.