Equity in home used for gift of home to daughter
Hi Terry
My husband and I owe less than $140k on our home which is now valued wayyyy over our purchase price of $250k. The home is valued at $420k and we want to purchase a 2nd home for our 21 year old daughter. She is currently getting her doctrine in Physical therapy and has 3 years left. Would it be smart to pay cash for the home. We would only do so if we are able to refinance or take out a home equity loan. Our budget is between $75k and $100k and we will need money to fix the home up. What would be best. Please advise. Thanks
Terry Says
I completely understand the desire to buy a home for your child. BUT — she has three years of school left. And at the end, she might not live in the same place! And this purchase could completely mess up your own retirement plans.
Have you considered all that?
I have no idea whether home prices will continue to soar, or whether higher rates (done by the Fed) might trigger a recession and falling home prices. This is not a speculation on home values. This is just me saying your plan doesn’t make sense.
If you want to give her $500 a month toward her current rent, that’s nice. But buying a home under these circumstances doesn’t pass my “good idea” test. So I can’t comment on your alternative financing methods.
