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Rent to own programs

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Jazzzy
Valued Contributor

Re: Rent to own programs


@Anonymous wrote:

thanks to everyone who has replied thus far. My problem is not my income or my ability to make a down payment. My problem is simply my credit score. I have baddies that wont fall off for years and I have done everything i can (taking the advice from this board) to get them removed. I have been unsucessful and have come to the realiztion that i just have to wait, and wait, and wait.

 

I am tired of living in apartments and want to feel like the money i am spending every month is acutally going toward something. My husband and I were considering expanding our family, but can't do it without more space. I don't want to keep moving my family from place to place. I would like us to be able to be settled in a new home. I only considered rent-to-own or seller financiing for these reasons. I live in tennessee, and here they have some rent to own properties that are new construction. I just didn't want to make a down payment and end up losing it over some stupid glitch in contract. It sounds like the majority of you don't think its a very good idea, so i guess I will just have to wait and see if I'll ever be able to fullfill my dream of owning a home. Its very frustrating because I have the money and the income for it. I litterally have no debt either. My past credit issues (3 year old bankruptcy and multiple paid medical collections---yes i tried the Hipaa process and it didn't work) are still haunting me.


Hang in there. And remember that not wanting to have a baby until you have more space and not wanting to have to move after having a child are "wants" and not "needs." If you truly want a child, they can fit just about anywhere. And...they're portable. They can move from an apartment to a house at any time. They don't care.

 

I have five, and we did it with very little space. We moved as the family grew. Now we live in a fairly large house that would have worked great for us when we had all five at home. Now, we have one left at home...and she will go off to college soon. It's not realistic to think we can have it all first...before the children.

 

Just something to think about...

Message 11 of 12
MattH
Senior Contributor

Re: Rent to own programs

 


@Anonymous wrote:

thanks to everyone who has replied thus far. My problem is not my income or my ability to make a down payment. My problem is simply my credit score. I have baddies that wont fall off for years and I have done everything i can (taking the advice from this board) to get them removed. I have been unsucessful and have come to the realiztion that i just have to wait, and wait, and wait.

 

I am tired of living in apartments and want to feel like the money i am spending every month is actually going toward something. My husband and I were considering expanding our family, but can't do it without more space. I don't want to keep moving my family from place to place. I would like us to be able to be settled in a new home. I only considered rent-to-own or seller financiing for these reasons. I live in tennessee, and here they have some rent to own properties that are new construction. I just didn't want to make a down payment and end up losing it over some stupid glitch in contract. It sounds like the majority of you don't think its a very good idea, so i guess I will just have to wait and see if I'll ever be able to fullfill my dream of owning a home. Its very frustrating because I have the money and the income for it. I litterally have no debt either. My past credit issues (3 year old bankruptcy and multiple paid medical collections---yes i tried the Hipaa process and it didn't work) are still haunting me.


 

Remember that renting X square feet of space almost always costs less per month when all costs are taken into account than does owning the same amount of space, because part of what one spends on housing as an owner is really an investment.  Therefore while renting you should be able to save substantially more per month, other things being equal, than you could as an owner.  So your money should actually be going toward something right now: building up cash.  If your cash position right now is not substantially stronger than it was 24 months ago, then you may not be ready to buy yet.

 

I suggest you figure out how much per month you'd need if you owned the home you envision, including loan PITI (principal, interest, taxes, and insurance) plus utilities, plus maintenance (anywhere from 0.5% of its value per month if it's very new and in excellent condition to maybe 1% or more of its value per month for an older house), plus any homeowners association fees, plus various other things.  Since major maintenance does not happen in every month, a homeowner should be saving towards maintenance in most months to cover the times when some big ticket repair is needed.  Anyway, talk to friends and relatives who own houses and find out how much in "surprises" they had to pay over the previous five years and divide by 60 to get a monthly number.  Now compare that with your current housing expenses.  Open a new savings account and every month without fail deposit in that account the extra dollars you'd need if you owned your home.  This will let you practice ownership and experience how readily your budget handles the extra costs.  AND when your FICO scores have improved enough to apply for a loan, you'll have more cash for down payment, closing costs, reserves, furniture, etc.., etc.

 

Also, be aware of the biggest financial downside to home ownership: unlike such investments as stocks and bonds, selling a home is costly and time consuming even when the market is a lot stronger than it is right now.  Therefore in addition to running financial numbers you should also consider how stable your overall situation is: home ownership works best financially if you are highly confident you will spend at least 10 years in that house.

 

TU 791 02/11/2013, EQ 800 1/29/2011 , EX Plus FAKO 812, EX Vantage Score 955 3/19/2010 wife's EQ 9/23/2009 803
EX always was my highest when we could pull all three
Always remember: big print giveth, small print taketh away
If you dunno what tanstaafl means you must Google it
Message 12 of 12
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