It’s the zero-down loans that created this mess. If you can’t afford a down payment, how can you afford the house? A house costs a lot more than your mortgage payment. We bought our house in 1996. I put on a new roof for $22,000 and two new air conditioning units for $13,000. Three weeks ago, one of the A/C units went out. It cost me almost $7,000 to replace it. I’m waiting for the other one to go out, which will cost me at least $9,000 for a replacement.
Housing prices are down, but they may well go lower. If you and/or your wife lose your jobs, who’s going to take the loss – the lender or your wife’s grandmother?
This is not a good time to buy a house.
Any good lender is going to ask you for the source of your down payment. A “loan” from grandma won’t do it. She needs to give you the money for the down payment, and if things go wrong, she’s on the hook for the whole thing if she has represented her “loan” as a gift.. You may all be confronted with fraud, and you don’t want that.