My uncle passed away a week ago, leaving a house in Kirkland, a upper middle class suburb of Seattle, WA. That average house prices in this area is $405,000. My parents have decided that they want to buy the house free and clear from his estate and then give us a loan to purchase half of the home from them. This is assuming the house gets appraised for the price they want, no more than $350,000 (it needs about $100,000 of work). They are looking at is as an investment, making money off interest from the loan, which I would much rather give to my parents than a bank, and the appreciation of the house. It will be a 30 year loan at 6.8%.
Few questions, does this sound like a good deal? I do have some concerns that will be addressed and written into contract. Such as, at what point we could buy their half, or sell ours.
Now for those of you who have paid a mortgage before, is it better to pay down the principle or invest the money in more liquid high interest (but higher risk) investments? 6.8% seems a little high compared to the current APR rates, what are you paying? We are still in the preliminary process of this, but I am trying to get a good grasp on what is involved in the purchase of a home mortgage.