Home Buying in 80817>Question Details

abkalucard, Home Buyer in Fountain, CO

questions about how/ways to get into buying a house

Asked by abkalucard, Fountain, CO Fri Apr 26, 2013

hey, I'm 22 and i feel like renting a house is just throwing money into a fire pit to never see again for a temporary roof over my head. I would really like to (possibly) do a rent to own type of deal and really like to know what it entails or if there is better ways to go about it. where should i look? what should i look for? i would be moving from one state to another, so that's another issue all together. any advice?

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11
Thanks for the question. Sometimes renting can feel like "throwing money away"; but sometimes it is a good option for a season if, like in your case, someone is renting at a bargain so they can save up to put a good down payment on a home. It sounds like to me a great starting point for you would be to meet with a mortgage broker to discuss different lending programs and options to see which one(s) are right for you. Purchasing a house prematurely and becoming house poor or worse could be much worse than renting for now in order to purchase wisely later. While I am not a mortgage broker, I this Dave Ramsey's recommendation is the ideal plan. Save up until you can put at least 20% down or purchase a home that will give you at least 20% equity and do a 15 year fixed rate mortgage if possible. That sounds difficult but here's why: having 20% equity from the beginning will typically mean no mortgage insurance which will save you a good chunk on your mortgage payment and doing the 15 year plan will save you tens of thousands of dollars in interest will only costing you a few hundred bucks more per month and you are free of a mortgage payment 15 years sooner. To summarize my answer...start by getting together with a good mortgage broker to discuss options. If you would like a couple of recommendations I would be more than glad to help you out. You can contact me any time. Have a great day! Here is a link to a calculator you can use to compare 15 and 30 year fixed loans.

Jake Norman
Landmark Premier Properties
(719) 310-9973
http://www.jakenormanrealestate.com
0 votes Thank Flag Link Thu Oct 24, 2013
Best place to start is to hire an Exclusive Buyer Agent. EBAs only work with homebuyers and there is never a conflict of interest that will jeopardize your negotiating position.

I've had a book published called Buying a Home: Don't Let Them Make a Monkey Out of You. It'll be the best $7 you've ever spent.

Good luck!
0 votes Thank Flag Link Sat Apr 27, 2013
I think that you are starting to take the right step when considering a purchase of a home. Generally it is cheaper to buy than it is to rent. I also do not recommend that you do a rent to own type of situation. The reason for this, is in most cases you have to put down a larger downpayment than you would just being able to purchase a home for yourself. Also in a rent to own situation depending on what is negotiated, you will need to be ready to purchase the home in 1-2 years, meaning getting your own loan. If you do not have the credit or the income you could lose the downpayment that you have in the rent to own and be back at square one with all that you have saved and put into this home gone.

It is best to live in the now. Find out what you qualify for with your current standings. Even if you have to start with a townhome or condo you still would be earning the equity and your money would not just be gone every month.

There are first time home buyer programs like Chafa and bond money that will help you with your down payment and money needed. In some loan situations if you have family or friends who can help they can provide what is called gift money to help with the down payment as well.

If you would like to talk more, feel free to contact me gettingcoloradospringssold@yahoo.com or 719-271-5749. I offer a free no obligation consultation. We can sit down and talk about your specific situations and find a solution that works best for you.
0 votes Thank Flag Link Sat Apr 27, 2013
Are you shopping for a Home? It may seem backwards to shop for a mortgage before you shop for the house, but there are several reasons for doing this. Shopping for a mortgage will also help if you can get “pre-approved” for the amount you’d like to borrow. This means the lender has looked over your credit and financial statement and agreed to lend you the money. Sellers like pre-approved buyers because there’s less risk the deal won’t go through. First, you’ll find out how much you can borrow, which has a lot to do with how much house you can buy.

Whether you’re, buying, building or Re-Financing your dream home, you have a lot riding on your decision. Market conditions and mortgage programs change frequently, and I welcome the opportunity to serve your needs with quick and accurate real estate financing advice. I have the expertise and knowledge to help you determine the absolute best loan program to meet your objectives. Get my Top 25 Questions for FREE that you should be asking your lender before you choose them to secure a mortgage along with a FREE copy of The 8 Deadly mistakes to avoid when buying a Home. If you are already working with a lender, don’t be shy to give me call so I can price the same mortgage for you with less cost. What do you have to loose but your money?

Ensuring that you make the right choice for you and your family is my ultimate goal. And I am committed to providing my customers with mortgage services that exceed their expectations.. As always, you may contact me anytime by phone, fax or email for personalized service and expert advice.

I look forward to working with you!
Lowell Sterling
Mortgage Banker
NMLS# 968898
LSterling@englending.com
16800 N. Dallas Pkwy, Suite 290 | Dallas, TX 75248
Office: 972-646-2411 | Fax: 214-614-4637
Bank of England FDIC /dba ENG Lending: NMLS# 418481
0 votes Thank Flag Link Fri Apr 26, 2013
Real Estate practices and laws differ from state to state, so it would be best for you to consult with a Realtor in the state in which you will be looking.

You mention "Rent to Own" and I generally DO NOT recommend this type of transaction as it is almost always not a benefit to the buyer, however if you do choose to go in that direction I HIGHLY recommend that you retain an Attorney fluent in Real Estate to review any contracts between you and the landlord/seller and provide you proper advice since Real Estate Agents cannot provide legal advice unless they are also Attorneys...which is rare.

You should also consult with a lender who is LOCAL to where you will be looking (most likely a local Realtor will be able to refer you to a local lender) to settle as they will be familiar with local customs and issues that could affect your loan transaction and will be able to advise you on what you need to do, if anything, to prepare yourself to obtain a loan.

Hope this helps
Best Regards
Brian L. A. Wess
Realtor®, Broker Owner
CRS, CDPE, GRI, ABR, ASR, CSR, CNS, SFR, e-PRO
Military Relocation, Residential & Investment Specialist
Infinite Horizons Realty - Metro Brokers
Colorado Springs, CO
Direct: 719-528-6672
Web: BrianWess.com
COLORADO REAL ESTATE...DONE RIGHT!â„¢
0 votes Thank Flag Link Fri Apr 26, 2013
thank you all for the quick answers, however i dont know if i could get pre-approved for much (if at all) seeing as how i despise credit cards and for everything i have bought (my car included) i have just put my time/money aside. saving and buying in cash. (this may seem really naive, seeing as how i dont know what goes into getting per-approved from a bank. i have never even attempted to get a credit card)
0 votes Thank Flag Link Fri Apr 26, 2013
My advice is to save up enough to live on for six months, then assemble a down payment and buy a house outright.

If you've ever gone into a rent-to-own furniture store, the furniture is good enough, there's a decent selection, but that's nothing like what you can choose from if you've got a credit card or cash. Houses are that way, too. With rent-to-own, your options are few, and you are paying (dearly) for the option.

Here's the other little thing about rent-to-own: after you've given the "seller" a significant deposit ("Option money"), and agreed to pay above-market rent . . . s/he may stop making payments on that house, and it can get foreclosed on and you wouldn't get any of your money back. Oh, you could sue them, for whatever good that would do you.

So, unless you want to get fleeced, give up the rent-to-own and go about saving up money for a down payment.

All the best,
0 votes Thank Flag Link Fri Apr 26, 2013
My advice is to save up enough to live on for six months, then assemble a down payment and buy a house outright.

If you've ever gone into a rent-to-own furniture store, the furniture is good enough, there's a decent selection, but that's nothing like what you can choose from if you've got a credit card or cash. Houses are that way, too. With rent-to-own, your options are few, and you are paying (dearly) for the option.

Here's the other little thing about rent-to-own: after you've given the "seller" a significant deposit ("Option money"), and agreed to pay above-market rent . . . s/he may stop making payments on that house, and it can get foreclosed on and you wouldn't get any of your money back. Oh, you could sue them, for whatever good that would do you.

So, unless you want to get fleeced, give up the rent-to-own and go about saving up money for a down payment.

All the best,
0 votes Thank Flag Link Fri Apr 26, 2013
The way the market it moving right now, with interest rates as low as they are, you would definitely benefit from buying as opposed to renting. Your first step is to call/visit a Mortgage Broker or bank and find out how much you can get pre-approved for and what you will need to put down. Then find Realtor you want to work with and start your search for your new home!
0 votes Thank Flag Link Fri Apr 26, 2013
i have about 2,250 in savings right now, and I'm not moving for a few months. i haven't contacted a lender I'm more or less looking for ideas on what rout i should take because the whole idea of rent not going to anything is just killing me
0 votes Thank Flag Link Fri Apr 26, 2013
I like idea of just buying outright. As an agent, I would never want to participate in a rent to own situation. I understand for some people it makes sense, but most of these scenarios are set up in the seller's favor and put the buyer at risk if they don't go through with the purchase. If you're a first time home buyer, you may qualify for downpayment assistance, or you may even qualify for a VA loan which requires no downpayment. There are ways to get into a house for as little as $1000. Whenever you're ready, the first step really is to talk to a lender and find out where you stand with getting a loan. Once that's out of the way, you know your price, terms, closing costs, etc and can start house shopping with a Realtor:)
Flag Tue Nov 12, 2013
How much do you have saved for your down payment? Have you tried a lender?
0 votes Thank Flag Link Fri Apr 26, 2013
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