my husband and I are waiting for an opportunity to purchase a home within the year. would it be a good idea to pay up our rent for the entire year?

Asked by Cynthia, 30331 Thu Dec 16, 2010

and then focus on our house purchase. we have some credit issues to clear up. thank you CynthiaH.

Help the community by answering this question:

+ web reference
Web reference:

Answers

13
Alice Williams’ answer
Alice Willia…, Agent, Atlanta, GA
Wed Dec 22, 2010
Cynthia, you should definitely take the money you planned on using to pay your rent for a year and pay off the debt that is causing the credit issues. You and your husband are planning on buying in a year because you need to clear up your credit, but if you pay your rent for a year you will still have those credit issues. Every time you pay off something that's hindering your credit, your score goes up. If you focus on lowering your debt-to-income ratio and removing all of the derogatory items on your credit, you and your husband could be ready to buy in 6 months! I've had plenty of buyers I've worked with between 6-12 months and because they did exactly what the loan office told them, they were sitting at the closing table collecting the keys to their own home!

If you want information for down payment assistance there are a couple that I've used that my clients were very happy with:

1. Georgia Dream homeownership program: http://www.dca.state.ga.us/housing/homeownership/programs/RU… or
2. Atlanta Development Authority: http://www.atlantada.com/buildDev/HomeAtlanta.jsp

You can take the homebuyer education class at Resources for Residents and Communities of GA, 100 Flat Shoals Avenue, SE - Atlanta, GA 30316. 404.525.4130 x15

Good Luck and please feel free to contact me if you need help or have any additional questions.

Alice Williams
678-754-0199
alice.williams@metrobrokers.com
BHGRE Metro Brokers
0 votes
Aaron Catt, Agent, Meridian, ID
Fri Dec 17, 2010
Cynthia,

Yikes! Keep the cash! I don't want to read through everyone's responses, but I'm betting that most would agree.

Here are some possible scenarios that could arise out of letting your landlord take a years worth of rent:

1. They lose the home and you're out the cash.
2. Tragically, you or a loved one winds up in some sort of emergency--you'll want those funds.
3. You find a great deal on a home and you're pretty obligated to a year lease anyhow, but some landlords will take a "buy-out" if you want to terminate early.

Those are just a couple of scenarios. Unless no one on the planet will rent to you, there should be no reason to pay that much rent up front. Even then, you can settle for different terms like: First and last months rent--increased deposit (still questionable).

In the mean time, clear up the credit issues!
0 votes
Keena Kirkman, Agent, Atlanta, GA
Fri Dec 17, 2010
As a RE Agent I advise you to pay your monthly rent and deposit the money to the bank. You are dealing with a new landlord and you do not know if he will respect the terms of the lease for instance repairs. Have your credit report pull now and start the repair, it is just discipline and I am sure you can do it. So, by the end of the lease you will be at the door of your dream home. I wish you the best.

Fatou Keena Kirkman
GEORGIA Elite REALTY
0 votes
Dallas Texas, Agent, Dallas, TN
Fri Dec 17, 2010
Why pay your rent for an entire year? Use that money place in a bank account and draw interest money you earned off saving account apply towards down payment or reducing credit card balances

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes
Solomon Gree…, Agent, Duluth, GA
Fri Dec 17, 2010
Yes, this is a slightly different answer, actually a recommendation. Extend your lease as you planned, but continue to pay monthly and on time.

So what's different?

Rather than speak immediately speaking with a lender, consider registering for a home buying class and get your class certificate so that you can take advantage of any down payment assistance programs. By doing so, you will learn about the home buying process, how to correct errors on your credit reports and how to position yourself to buy when you are ready. These classes are around $30 or so to cover class materials, but you'll find the investment well worth it.

Please feel free to call or write and I'll provide a list of recognized counseling agencies.

Solomon Greene
REALTOR® Keller Williams Realty Atlanta Partners
(678) 775-2677
0 votes
Stephanie Mc…, Agent, Canton, GA
Fri Dec 17, 2010
agree with others - work on credit issues, pay all your obligations on time, and don't make any large purchases or change your debt (unless you decrease it, which is a great thing). Speak with a direct lender loan originator like someone at Bank of America or Wells Fargo and they will also give you some tips about what needs to be addressed and will probably have ideas about the best way to go about it. Good luck.
0 votes
Hank Miller, Agent, Alpharetta, GA
Fri Dec 17, 2010
Nothing in advance as has been said, work on the credit. Many times, renters have no idea the financial status of the owner, he might be a heartbeat away from the steps and you dropping money in advance takes you down as well.

Use your effort to improved your positon so you can attack the market confidently.

Hank
Web Reference:  http://www.hrmiller.com
0 votes
, ,
Fri Dec 17, 2010
As a lender in the metro Atlanta area, there is NO reason to pay your rent in advance. As stated by others, your landlord does not report to the credit bureaus, therefore is does you not good or gives you no positive to pay your rent in advance. To the contrary....I would rather pre-qualify you with more money in the bank (which is key in loan approval) than to say you had pre-paid your rent. Keep your money, and pay as you go. As someone said, you might find the house of your dreams BEFORE your lease is up and maybe you could buy the lease out for less than the full year of rent.

Good luck to you.
0 votes
Mark Lackey, Agent, Norcross, GA
Fri Dec 17, 2010
Most landlords and property managers don’t report regularly to the credit bureaus unless you don’t pay. Find out if they report first.

Mark Lackey
Atlanta Housing Source at
Solid Source Realty, Inc.
Associate Broker
EcoBroker
Mark@AtlantaHousingSource.com
404-886-8789

Services
Home Buyers & Sellers - http://www.AtlantaHousingSource.com
Property Management – http://www.SolidSourcePM.com
0 votes
davidwbrower, , Woodstock, GA
Fri Dec 17, 2010
Cynthia,

I think you are finding a common theme here.... just to repeat what's already been said, I would keep my money in my hands as long as possible. Meaning, why would you let your landlord benefit from all your cash on hand. If you do find that perfect home while your stuck in your rental b/c you've paid your rent for an entire year and burned through all your cash, you will not be in a position to make a purchase. If you have "credit issues" you'll be denied a loan. Resolve your credit issues. Get with a lender who can guide you as to what to do to resolve your credit. Paying an entire year's worth of rent is not going to change your credit issues. If you owe creditors... pay up with the cash you have on hand. Pay off any outstanding debts and/or past debts that may have gone to collections. A good lender with a credit repair plan can guide you. If you don't have one, please contact me and I can recommend someone who will help you with this. That is your number one priority. Keep your money until you absolutely need it. You never know what might happen. Good luck.
0 votes
Wanda Britton, Agent, Morrow, GA
Thu Dec 16, 2010
Cynthia, paying your rent in advanced may hurt you in the long run, especially if you find a great deal on a property before your lease is up. You may not be able to be re-imbursed for the overage. Having that money saved in a savings will benefit you the most. If you have any others questions feel free to contact me.

Wanda Britton
770-899-1279
http://www.wandasellatlantahomes.com
0 votes
Brandon Alex…, Agent, Atlanta, GA
Thu Dec 16, 2010
I agree with Gary, focus on your credit. Just be sure to submit written notice to vacate and yes, the extra money could go towards closing costs or down payment.
Web Reference:  http://www.bjarealty.com
0 votes
Gary Geer, Agent, Antioch, IL
Thu Dec 16, 2010
Cynthia,
I would concentrate on resolving your credit issues. Having your rent paid in advance for a year might sound good, but you may find your perfect home during that year and want to close before the year end. That extra rent money could be used for your closing costs. You may want to check your lease agreement to see if you can break the lease prior to the years end if needed and what your costs for doing that might be. This is a great time to find and buy a home. Interest rates and home prices are great! If you wait, prices may go up along with interest rates by the time you are ready.

All the best,
Gary Geer
http://www.GaryGeer.com
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more