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 ... firstname.lastname@example.org. I wish you well.
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
Hope to hear from you soon!
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...
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
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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!
Please let me know if I can help with anything else.
Ali, Community Manager