Considering buying a house, advice.....

[Microman]

We have a house that is paid for.

Next door neighbor passed away, and her house if for sale.

Interest Rates low, Prices low.

Was considering having my son and girlfriend pay the rent they're currently paying towards the payment.

I think we can afford it. ANd hopefully we can come to terms on selling price. We may be able to do this without a real estate agent. But I guess that would only tend to save the seller money.

I would like to go with a 15 year loan. My CU that we do all of our home checking with and had our original home loan, has an interest rate of APR of 3.514, 4.017, 3.98 depending on where in the process or what page online I am on.

Like all things, I could always find a cheaper interest rate online, and some ONLINE co. , but is that a good idea? And how does one go about getting the best interest rate, if that is what I would get for giving up working with a CU that I am use to, without having to fill out APPlication after Application over and over again.

Thanks..

[iaJim]

What are you hoping to gain by purchasing this house? You will be tying up your available money on an asset that you may not be able to liquidate when you need to. If you are doing your son a favor, that's one thing. I'd be a little afraid of doing this.

[Filliam H. Muffman]

Can I get you to adopt me?

[Trouble]

Microman wrote: Was considering having my son and girlfriend pay the rent they're currently paying towards the payment.

Your son and girlfriend? Swingers? :burnout:

[macphanatic]

If you do this, consider a contractual agreement so that if son and girlfriend part ways, she doesn't make out on the deal. Not saying it will happen, but it could and you may wind up with the short straw.

[mattkime]

you certainly make a solid argument but iaJim makes a good point - will you remain solid financially even with this burden? (retirement well funded, rainy day fund, etc)

[cbelt3]

I have a coworker that, once his sons were in good jobs and making good money, worked with them to help them buy and refurbish foreclosed homes. Both boys, in their early 20's, will own homes free and clear in 5 years.

Can your son buy the house ? Can you provide a downpayment for that purpose ? Cosign if you wish ? But it's important that it's not 'Dad''s house where he lets me live' but HIS house.

[davester]

Microman wrote: ...Prices low.

Relative to what? We've just come out of a huge housing bubble where the entire country's housing stock was grossly overvalued and have now suffered a large correction. It would be more accurate to say that prices are now normalized....maybe. They could definitely continue downwards, especially if interest rates inched up. In many parts of the country renting is much more financially sound than buying.

It sounds to me like you haven't done a proper financial analysis. Any income real estate purchase (or any real estate purchase) must be accompanied by a careful analysis that shows where the money is going to come out of the deal. If you don't do that you will almost certainly lose.

[Black]

davester wrote:
[quote=Microman]...Prices low.

Relative to what? We've just come out of a huge housing bubble where the entire country's housing stock was grossly overvalued and have now suffered a large correction. It would be more accurate to say that prices are now normalized....maybe. They could definitely continue downwards, especially if interest rates inched up. In many parts of the country renting is much more financially sound than buying.

It sounds to me like you haven't done a proper financial analysis. Any income real estate purchase (or any real estate purchase) must be accompanied by a careful analysis that shows where the money is going to come out of the deal. If you don't do that you will almost certainly lose.
Agree w/ davester in spirit, although I've done relatively allright without painstaking analyses prior to my purchases.
There is still a huge amount of uncertainty and potential turmoil in the housing market. There is still potential for things to get much worse.
I would say if you can pay cash and still have a reserve, your plan is a no-brainer. If you have to finance, I'd tread very very carefully, Do you have a sense of what sort of condition it's in and what the asking price will be? Is anything selling in your area? You could end up financing a home at $150k that you could have had as a foreclosure down the road for 50k.

[Microman]

This is a Southern California home. Tract Home.

Zillow had it at 447K years ago, now it says 340K