Josie Garcia, Home Buyer in Houston, TX

we have been renting for 9 years,and we are tired of renting? are those rent to own houses a good deal?

Asked by Josie Garcia, Houston, TX Thu Jun 7, 2012

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Mark McNitt, Agent, Houston, TX
Thu Jun 7, 2012

No! Not a good idea. The question I would have for you is why? Are you lacking funds for down payment or closing cost? Do you want to purchase the home your renting now?

Rent to own is a very complicated transaction and you would need an attorney to draw your purchase contract. We can understand your tired or renting, but getting ripped off would be worse!

I would plan to speak to a lender and a Realtor to get you ready. Look to purchase your new home in say 6 months...plenty of time to get your finances ready and look for just the right of home. Don't be afraid to purchase. You will be your own landlord and your rent (mortgage) will likely be less than what your paying now!

Mark McNitt
m 832-567-4357
Bernstein Realty
1 vote
Elliott R. O…, Agent, McLean, VA
Thu Jun 7, 2012
Depending on your credit, income and where you are looking to live, you may qualify for 100% financing under the USDA RHS program:…
0 votes
Neal Sanford, Agent, Houston, TX
Thu Jun 7, 2012
Great advice from everyone. Al is correct about Realtor's not being permitted to do them in Texas. The state may be the only one that protects consumers in this area. One option you might check into is down payment assistance. I just got a couple $30,000 through a local program. There are many programs out there and the income limits are pretty high. If you would like to look into it give me a call, Neal Sanford, RSG - Realty Star Group, LLC, 713-960-1140 or contact me at:
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Al Geffon, Agent, Houston, TX
Thu Jun 7, 2012
Josie ...

The information you've received here is absolutely on the money (no pun intended). I wouldn't recommend a rent-to-own deal to anyone, and for the reasons already stated. Further, Realtors aren't permitted to do them in Texas ... an attorney is required, and two separate contracts (one each for the lease and the purchase) must be drawn up.

I'm certain that you're aware of today's record-low interest rates ... but with that comes some more restrictive qualifications. 100% financing is no longer available ... 3.5% on an FHA-insured loan is about the best you're going to do. In terms of dollars, let's take $150,000 as an example ... you'd need $5250 down plus closing costs. We could negotiate some seller contribution to that expense, but you'd still have to come up with the difference. My rule of thumb is 6% to 8% of the sales price (including the down payment) for such transactions, subject to slight change in either direction, depending on the terms.

As noted elsewhere, your first step is to contact a lender, so that you may determine what qualifications you meet, and which ones you need to work on. I always recommend a credit union, since their closing costs tend to be lower. There are also some excellent mortgage brokers ... I work with several, a couple of whom specialize in first-time buyers. Avoid the big banks ... they tend to be totally inflexible, and their charges are higher.

I know you're looking for encouragement ... but you must first be aware of the ground rules before moving forward. If I can be of any further service, please feel free to contact me at (713) 213-6350 or ... I look forward to hearing from you.

Regards ...

Al Geffon
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Mirna Johnson, Agent, Houston, TX
Thu Jun 7, 2012
Hello Josie,

I would love to help you find your next home. Have you tried getting prequalified by a mortgage lender? I can help you find one so that you may get started to get preapproved and once you know exactly what price range you need I can also help you in finding a home. Please let me know if you would like for me to help you find your dream home.

Hope to hear from you.

Mirna J.
RE/MAX Cityview
0 votes
Sunny Goode, Agent, Houston, TX
Thu Jun 7, 2012
Josie, I would suggest you talk to a reputable lender/Mortgage broker first, it's very likely you may qualify to buy a home, predicated on your rental history, employment income etc; Once prequalified you wont be restricted by just looking at rent to own. There is a good inventory of homes for sale, including resale and new homes. You can find buyer information and search for homes at my website also I will be happy to put you in touch with lenders you can talk to without obligation. It is also helpful to know your own credit score and report. There are some landlords/properties that will do a lease to own, also owner financing, but keep in mind interest rates are usually higher and there are many good programs out there at low interest rates and low down payment. Either way, always use a good realtor who can advise and guide you in the right direction.
I am always happy to help and answer questions: 832-274-7572
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David Tansey, Agent, Houston, TX
Thu Jun 7, 2012
Rent to own is almost never a benefit. The owner won't generally apply any equity from the rent unless the raise the rent above the normal lease rate. I would look into getting yourself qualified for a FHA loan. You can get yourself into a house for as little as 3.5% down and you can often get the seller to pay some or all of the closing expenses.
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Tim Moore, Agent, Kitty Hawk, NC
Thu Jun 7, 2012
No they are not. Can you buy? Can you get a loan? If you can then buy and don't fool with rent to own where you can lose money if you can't get a loan in a year to buy it. You still have to be able to get a loan to buy it or you lose it and any option money you put up. Go talk to a lender and see what they say about getting a loan.
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