We’re lifelong renters but eager to finally buy. We’re relocating from NY to SF and my spouse’s employer is offering a $250K interest-free, 5-year, no-payment loan. It’s a one-time benefit with a 12-month window, so if we don’t use it, it disappears. We’d invest the payments we would have made during those five years and pay it off at term.
The challenge is that SF real estate is wild. Everything we like at our price point (originally around 1.0M but creeping toward 1.3M) goes way over asking. Inventory is thin across the board, and having a secondary loan in the mix makes our offer less competitive. We'd put 20-30% down with a traditional primary mortgage. The places we have a higher likelihood of winning come with drawbacks — no parking vs longer commute, etc.
So we’re stuck between buying something that feels just okay so we can use the loan and own something for once, or finding a short-term rental and wait for something that feels like more like "the one", which frankly may not happen and comes with the risk of losing the benefit entirely.
Has anyone navigated a similar tradeoff? Use the financial perk now or hold out? We don’t expect this to be our forever home but we do hope to stay at least seven years.
Thanks for your thoughts!
SF: Buy a place we don’t love just to use an interest-free loan?
byu/kpooby inRealEstate
Posted by kpooby
4 Comments
How does the loan work? Will the employer put a lien on the property you’re buying to ensure repayment over the 5 years? Does the payment balloon at the end of the 5 years or can you continue it at a set rate?
Use it. You aren’t going to find “the one” or at least you can look for it later.
This is too personal of a question without a full overview of your financials, plans, employer structure etc….
At face value, yeah, that’s a deal that would be cool. You need to talk to a good realtor and financial planner and go much further in depth than any info you could provide (or should provide) to strangers in the internet. Good luck, may be a great tool if used correctly.
1. What is the ONE? Describe it with location and max amount you are qualified for and we can better tell you if it is possible.
2. What is Plan B if you don’t buy?
3. I’ve managed to buy in in every one of the last 5 decades and they all doubled in value in about 2 years. I would never buy based on that but based on holding forever but not live in it forever so all my purchases are based on what suits my needs now and what would be a good investment property in the future. Fixed rate mortgages and Prop 13 favors longevity in ownership.