Home Buying in Houston>Question Details

Sean Elder, Home Buyer in La Porte, TX

I'm looking into leasing or renting with the option of purchase.

Asked by Sean Elder, La Porte, TX Wed Aug 8, 2012

What I would like to know:

A.) The typical cost of a 3/2 single family either townhome or condo (is there a difference other than location, neighborhood, etc.?)

B.)Would living outside of "city limits" be more cost effective? (Recently out of college, stable job, married with children; that's why I'm asking.)

C.)Would I be able to get an FHA or other type of loan if I rent/lease to own?

D.) What other options do I have as a first time home buyer with student loans?

Help the community by answering this question:

Answers

9
Most owners would rather sell than rent if they're not home investors.
Please feel free to call my office 832-301-4841. Mon thru Fri. 8:00 am -6pm
0 votes Thank Flag Link Fri Aug 10, 2012
Sean ...

I can't think of anything worse than a rent-to-own scenario. If nothing else, there are few if any available properties (owners would rather cash out than hold on to the homes for any length of time) and most need considerable work ... there's a reason why they can't be sold in a traditional manner. Realtors in Texas are not permitted to participate in rent-to-own transactions. An attorney is required, along with two distinct contracts ... one for the lease, the other for the sale. You'd have to qualify for a mortgage at some time (generally at the end of the lease), and only a small portion of the rent (if any) would be applied toward the down payment, requiring you to come up with a significant amount of cash. There are numerous discussions about rent-to-own purchases here. Please take the time to read the forums ... you'll get a better idea as to why they're such bad a deal for conumers.

A relatively small number of properties are available on an owner-financed basis. However, you'd need at least 20%-25% down, the interest rate would be considerably higher, and you'd have to qualify for a mortgage to pay off the owner (this is known as a "balloon"), generally in three to five years. Once again, it's not a viable option for most people.

Both of these are incredible opportunities ... for the owners.

Qualification for an FHA-insured loan is required. You'll need a FICO score at least in the low to mid 600's, in addition to about 6% to 8% of the purchase price (including a 3.5% down payment) in order to even consider buying a home. If you're VA-qualified, 100% financing does exist.

As for cost-effectiveness, it's pretty much a wash ... you'll get lots more house the further out you go, but the increase in taxes (not to mention the cost of a daily commute) might just negate any advantage. Every location is different. I'm certain that we can find a viable compromise.

There is no "typical" price in this market. I just wrote a contract on a gorgeous 3300 sq. ft. home in the Champions area ($170's). That same property in Galleria would run at least in the $750's. There are definitely some "sleeper" areas, as well as those that offer little bang for the buck, but a prestigious address. This is precisely why you need a savvy, dedicated and focused Realtor.

Student loans can factor into a lender's decision ... but it's worse if they're in deferment, arrears or default (and in that order). Depending on other factors, they may or may not be deal breakers. You should contact a lender to be more certain. I know several excellent ones, and will be glad to refer you. There's no compensation in it for me. It simply makes my job much easier to work with true professionals at every level.

I've helped many first-time buyers on limited budgets. If I can provide you with additional information, or address any questions or concerns, please feel free to contact me at (713) 213-6350 or ... al@algeffon.com. I wish you well.

Al Geffon
Web Reference: http://www.har.com/algeffon
0 votes Thank Flag Link Wed Aug 8, 2012
Typically a renter/buyer is looking to lease option because of credit issues, or loan requirements they cannot meet at the current time, is keeping them from buying. If this is your situation then it is best to find a nice place to lease and when you are able to buy don't settle for the lease you are in, but pick from all the available homes in your market. Feel free to check us out on http://www.PGRsells.com for more information about us.

A- All the example you gave dictate value. Best to find a Realtor to help with your search. They will be able to match the area, features and budget.

B- Not necessarliy. That depends on your household budget and life style. There are affordable properties in and out of the city.

C-Good rental history will only improve your chances

D- There are many loan programs and options for buyers today. Call Franky Bonilla with Churchill Mortgage - 832-206-8457 or visit him at http://www.churchillmortgage.com
0 votes Thank Flag Link Wed Aug 8, 2012
Hi Sean, I am a Sr. Loan Officer/Branch Manager for Academy Mortgage and would be glad to talk with you more about buying a home now or in the future. I can pull a free credit report, and discuss several loan options with you. With your free credit report, I can provide you with a credit analyzer that will provide details of anything you could do to increase your score whether you decide to buy now or later. Please feel free to contact me directly at your convenience. You can also complete the application on-line if you want to start there. http://www.CloseWithAddie.com My cell phone is 832-754-6711 and e-mail is Addie.Sechelski@AcademyMortgage.com

Hope to hear from you soon!

Thank you,

Addie
0 votes Thank Flag Link Wed Aug 8, 2012
I have leased to numerous couples who then work on their credit, build up a downpayment, and then purchase a home later down the road.
The interest rates on an FHA loan are so low right now that an owner finance deal helps nobody but the seller.
If you do enter an owner finance contract, have your lawyer look over it carefully...
I can put you in touch with a good lender who will go over your credit report, you income to debt ratio, and your finances so you will know your options.

In the meanwhile, I will be happy to send you either for sale or lease home searches direct from HAR if you wish...Location means everything pricewise.
Feel free to search from my website, too...
0 votes Thank Flag Link Wed Aug 8, 2012
c) FHA loan - only applies if you can qualify purchase a home.

d) Recommend contact a lender determine what you can qualify for after loan application is completed. 2 years employment, Tax returns, debit /income , downpayment 3.5% or more only a few areas that require meet approval standards.

Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
Multimillion Dollar Sales Producer
972-699-9111
http://www.lynn911.com

Follow me on Facebook
http://www.facebook.com/lynn911dallas
0 votes Thank Flag Link Wed Aug 8, 2012
There are new T.R.E.C. regulations regarding owner financing issues. The biggest change is that there is now a 6 month option, nothing could be longer if it is a legitimate if it passes this time frame. Also, be very careful with owner finance options because many times they charge very high interest rates. Furthermore, if the property owner forecloses on this property, you will have some serious issues to deal with.

Nadeem - Realtor

281-795-0715
nadeem@qrealty.biz
0 votes Thank Flag Link Wed Aug 8, 2012
Hey Sean,

Have you checked out Trulia's rental directory yet? Take a look at the link below, I hope that helps get you in the right direction!

http://www.trulia.com/for_rent/Houston,TX/SINGLE-FAMILY_HOME…

Please let me know if I can help with anything else.

best,
Ali, Community Manager
0 votes Thank Flag Link Wed Aug 8, 2012
Look on Craig's List - there are a lot of owner financing homes. I know many investors that can help you locate a home. Call me if you want more details. 713-582-2255 Susan
0 votes Thank Flag Link Wed Aug 8, 2012
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