Readers are constantly reminded of how high the home prices are in California, and this is usually shown by the current median home price in the area. Too often, this is presented as an example of how "home ownership has become an impossible dream in Southern California."
We may be doing a disservice to our younger, less sophisticated neighbors who can be led to see the price of a home as $200,000 for first-time buyers. While the median price is occasionally defined, I think it might encourage those who may feel disenfranchised if they were to be shown their opportunities in that 50% of the housing market is below the midpoint.
As an example, our daughter and her husband bought their home (a condo in the Philips Ranch area of Pomona) with an FHA loan of $87,000. My wife and I provided the down payment and closing costs, co-signed the loan and provided $200 per month toward the loan and association fee payments.
Our return, in addition to helping our kids gets started, includes repayment of our down payment with interest upon the sale of the property and our use of the mortgage interest and real estate tax deductions, which nearly equally offset our $200 monthly contribution to the property.
By co-signing the loan, our names are also on the title. The kids' return has been owning their own home and earning about $20,000 in equity in 18 months. Their monthly payments were held below $800 a month.