Tenants often tell me they don't think they will qualify to rent-to-own because they have bad credit. They are pleasantly surprised to find out that rent-to-own (also called lease-option) is the perfect way to get the house you want to buy even with bad credit!
Although every home has different qualifications, most rent-to-own homes are available to someone with a very low credit score or even no credit. The most important qualification is your desire to IMPROVE your credit score.
You can often move into a rent-to-own home with a score in the 500s as long as you can prove you have enough income to pay the monthly rent and you have money to put down towards the purchase before you move in. Your monthly gross income before taxes should be about 3x the rent. You usually need to pay about 3 - 5 % of the purchase price before your lease starts.
It's very important while you are renting that you are improving your credit score, so you will be able to qualify for a loan when the lease ends.
There are many ways to do this. You can start by learning about your credit report and what to do to increase your credit score. You can do that free at Gary Moore's website:
www.repaircredit123.com
The next step is usually to find a good credit repair or credit counseling company.
I recommend Gene Schwalen at S.O.S. or Score Optimization Systems. You can reach Gene at 866.987.6700 Option 1
optimizemyscore@mycreditsos.comwww.mycreditsos.com
It's also very important to make sure the house you are renting-to-own fits your budget. For instance, if you make $3000 per month in gross household income, you can afford monthly rent that is about $1000-$1200 per month and you can afford to buy a house that costs about $100,000 - $120,000. If you want to rent-to-own a house that costs $100,000-$120,000, you will need about $3,000 - $6,000 on hand to pay towards the purchase before you move in.
Then while you are renting you will earn more money toward the purchase -- your rent credit. At Happy Home Solutions, we try to give very generous rent credit -- usually at least 50% of the rent. That money also goes toward the purchase. For instance, if you are paying $1000 per month for rent, and earning 50% rent credit, then you are earning $500 per month or $6000 towards the purchase in just one year!
Wouldn't it feel great to know that money is going towards your own house you are buying instead of in your landlord's pocket?
Give us a call today, so we can help you make that dream a reality!
Diane and Adam St. James
630-780-4663 office
630-697-4500 Adam's cell
312-213-8137 Diane's cell
Adam@MyHappyHomeSolutions.com
Diane@MyHappyHomeSolutions.com
Saturday, May 26, 2012
Wednesday, May 23, 2012
The Road to the Worst Credit Score Ever
by Amy Fontinelle
Wednesday, September 29, 2010
Your credit score can range from 300 to 850 — the higher, the better. Most articles about credit scores focus on how you can improve your score to get approved for loans and get the best possible interest rates from lenders, but here, we're going to take the opposite approach and tell you how to achieve the worst credit score ever.
If any of these behaviors apply to you, watch out — you're in the process of doing some serious damage to your financial reputation.
1. Don't Pay Your Bills
The most important part of your credit score is your repayment history, so if you want to have terrible credit, don't pay your bills.
Did you get a bill in the mail from your credit card company today? Don't open it. Leave it in the envelope and throw it on top of the growing pile of paper on your dining room table. By refusing to pay even the minimum monthly payment, the repayment history on your credit report will look terrible, showing that you have bills you haven't paid for 90-plus days. Eventually, your account will go to collections, making your score plummet further.
Better yet, throw your unopened credit card bill in the trash. That way, a thief might be able to acquire enough information about you to steal your identity, leaving you with a gigantic financial mess to clean up and completely trashing your credit score.
While you're at it, don't open your monthly mortgage statement, either. Keep doing this month after month. Eventually, you'll lose your home to foreclosure. Between the unpaid mortgage and the credit card bills, you may even have to declare bankruptcy. Bankruptcies and foreclosures are a great way to ruin your credit not just in the short term, but for years to come.
2. Charge It!
The second most important factor of your credit score is how much you owe. So if you want to ruin your credit score, make sure to max out all of your credit cards. Better yet, try to spend past the limit! Then, don't pay the bill — ever. Let the interest and late fees rack up. Instead of keeping your credit card balances below 15-25% of your total available credit, as credit experts like Liz Pulliam Weston recommend, see if you can manage to owe $10,000 on a card with a $5,000 limit.
3. Apply, Apply, Apply
Ten percent of your credit score is based on how many new accounts you have applied for recently. So if you want to mar this component of your score, why not surf the web and see how many credit card applications you can fill out in a single day? Best of all, if you get approved, you'll have new tools to dig yourself into an even deeper financial hole.
4. Be a One-Trick Pony
Your credit score tends to be higher if you use a mix of different types of credit, such as credit cards, store accounts, an auto loan and a mortgage. Of course, to get approved for a mix of credit in the first place, you'd have to be responsible with your money. If you want to look bad, don't mix it up - stick with credit cards. These are one of the easiest types of credit to get.
5. Assume That It's Hopeless
Once you've thoroughly destroyed your credit, there's no sense in hoping that things could get better one day. After all, a bankruptcy can stay on your credit score for up to 10 years. So don't visit a nonprofit credit counseling service for help. Don't work out a budget to help you manage your money better. Don't cut up your credit cards or freeze them in blocks of ice. And don't take any baby steps toward paying off your debts. Just resign yourself to a life on the streets - it will be harder for your creditors to track you down if you don't have a job, an address or a phone number. Don't believe anyone who tells you that you can turn your situation around in a year or two if you're motivated enough.
What Won't Affect Your Score
While you're hard at work destroying your credit and ensuring that your life will one day revolve completely around clawing your way out of debt, please keep in mind that there are a few destructive behaviors that won't have any impact on your credit score.
Unless you do it so often that your bank sends your account to collections, overdrawing your checking account won't have any effect on your credit score (though it will be very expensive). Getting divorced, in and of itself, will not affect your credit score, so don't think that stepping out on your spouse will get you any closer to a 300. Losing your job won't directly impact your score, either, nor will receiving unemployment checks or signing up for food stamps.
Credit bureaus don't care if you're on public assistance, and they don't care if you have a job — they're only interested in whether and when you pay your bills, not how you derive the means to pay for them. But hey — why stop at just destroying your credit when you could destroy your entire life?
The Bottom Line
Please don't follow the tongue-in-cheek tips in this article - we really don't want to see you ruin your finances, your relationships or your sanity.
___
We've reprinted this excellent article from Yahoo Finance.
Wednesday, September 29, 2010
Your credit score can range from 300 to 850 — the higher, the better. Most articles about credit scores focus on how you can improve your score to get approved for loans and get the best possible interest rates from lenders, but here, we're going to take the opposite approach and tell you how to achieve the worst credit score ever.
If any of these behaviors apply to you, watch out — you're in the process of doing some serious damage to your financial reputation.
1. Don't Pay Your Bills
The most important part of your credit score is your repayment history, so if you want to have terrible credit, don't pay your bills.
Did you get a bill in the mail from your credit card company today? Don't open it. Leave it in the envelope and throw it on top of the growing pile of paper on your dining room table. By refusing to pay even the minimum monthly payment, the repayment history on your credit report will look terrible, showing that you have bills you haven't paid for 90-plus days. Eventually, your account will go to collections, making your score plummet further.
Better yet, throw your unopened credit card bill in the trash. That way, a thief might be able to acquire enough information about you to steal your identity, leaving you with a gigantic financial mess to clean up and completely trashing your credit score.
While you're at it, don't open your monthly mortgage statement, either. Keep doing this month after month. Eventually, you'll lose your home to foreclosure. Between the unpaid mortgage and the credit card bills, you may even have to declare bankruptcy. Bankruptcies and foreclosures are a great way to ruin your credit not just in the short term, but for years to come.
2. Charge It!
The second most important factor of your credit score is how much you owe. So if you want to ruin your credit score, make sure to max out all of your credit cards. Better yet, try to spend past the limit! Then, don't pay the bill — ever. Let the interest and late fees rack up. Instead of keeping your credit card balances below 15-25% of your total available credit, as credit experts like Liz Pulliam Weston recommend, see if you can manage to owe $10,000 on a card with a $5,000 limit.
3. Apply, Apply, Apply
Ten percent of your credit score is based on how many new accounts you have applied for recently. So if you want to mar this component of your score, why not surf the web and see how many credit card applications you can fill out in a single day? Best of all, if you get approved, you'll have new tools to dig yourself into an even deeper financial hole.
4. Be a One-Trick Pony
Your credit score tends to be higher if you use a mix of different types of credit, such as credit cards, store accounts, an auto loan and a mortgage. Of course, to get approved for a mix of credit in the first place, you'd have to be responsible with your money. If you want to look bad, don't mix it up - stick with credit cards. These are one of the easiest types of credit to get.
5. Assume That It's Hopeless
Once you've thoroughly destroyed your credit, there's no sense in hoping that things could get better one day. After all, a bankruptcy can stay on your credit score for up to 10 years. So don't visit a nonprofit credit counseling service for help. Don't work out a budget to help you manage your money better. Don't cut up your credit cards or freeze them in blocks of ice. And don't take any baby steps toward paying off your debts. Just resign yourself to a life on the streets - it will be harder for your creditors to track you down if you don't have a job, an address or a phone number. Don't believe anyone who tells you that you can turn your situation around in a year or two if you're motivated enough.
What Won't Affect Your Score
While you're hard at work destroying your credit and ensuring that your life will one day revolve completely around clawing your way out of debt, please keep in mind that there are a few destructive behaviors that won't have any impact on your credit score.
Unless you do it so often that your bank sends your account to collections, overdrawing your checking account won't have any effect on your credit score (though it will be very expensive). Getting divorced, in and of itself, will not affect your credit score, so don't think that stepping out on your spouse will get you any closer to a 300. Losing your job won't directly impact your score, either, nor will receiving unemployment checks or signing up for food stamps.
Credit bureaus don't care if you're on public assistance, and they don't care if you have a job — they're only interested in whether and when you pay your bills, not how you derive the means to pay for them. But hey — why stop at just destroying your credit when you could destroy your entire life?
The Bottom Line
Please don't follow the tongue-in-cheek tips in this article - we really don't want to see you ruin your finances, your relationships or your sanity.
___
We've reprinted this excellent article from Yahoo Finance.
The American Dream... deferred?
Do you dream of owning a home but your credit is not good enough to qualify for a loan?
You are not alone. Millions of Americans have credit scores that have been decimated by medical bills, credit card overspending, unforeseen emergencies and more.
Does that mean you have to wait to own a home?
Not anymore. Even as banks get more strict about their lending rules and fewer and fewer loans are approved, savvy buyers are learning there are more creative ways to buy a home besides just qualifying for a bank loan.
One of the best ways to buy a home and start building equity NOW is by renting to own.
You are probably renting already. Imagine if half or even all of your rent was going directly to pay for the purchase of your home! You can qualify for that as a rent-to-own tenant, even if your credit score is low.
There are three major factors that determine if you can rent to own:
1) Can you pay your rent ON TIME, EVERY MONTH in order to earn your rent credit of 50% to 100% towards your purchase price?
2) Can you handle your own REPAIRS AND MAINTENANCE on the home just as a fully vested homeowner would?
3) Can you pay 3 to 10% option consideration up front to move into your dream home?
If you answered yes to these three questions, then you have taken the first important step to becoming a homeowner.
Don't let the economy, your friends or the media tell you that you can't have the American Dream, or that you have to wait. There is no need to defer your dreams; you can buy now!
At Happy Home Solutions, we help renters stop throwing their money away on rent by moving them into rent-to-own homes.
We just helped a couple from Cicero, Illinois move from a third-story walk-up apartment to a beautiful, 3 bedroom, fully rehabbed house in Waukegan, Illinois for a payment that is LESS EACH MONTH than they were paying in rent!
In my next post, I will provide a link of Marlena describing how excited she is to be purchasing her first home.
Let us help you be our next success story.
Contact Diane St. James at dianej-stjames@usa.net or 630-780-HOME to take that first step toward YOUR American Dream.
You are not alone. Millions of Americans have credit scores that have been decimated by medical bills, credit card overspending, unforeseen emergencies and more.
Does that mean you have to wait to own a home?
Not anymore. Even as banks get more strict about their lending rules and fewer and fewer loans are approved, savvy buyers are learning there are more creative ways to buy a home besides just qualifying for a bank loan.
One of the best ways to buy a home and start building equity NOW is by renting to own.
You are probably renting already. Imagine if half or even all of your rent was going directly to pay for the purchase of your home! You can qualify for that as a rent-to-own tenant, even if your credit score is low.
There are three major factors that determine if you can rent to own:
1) Can you pay your rent ON TIME, EVERY MONTH in order to earn your rent credit of 50% to 100% towards your purchase price?
2) Can you handle your own REPAIRS AND MAINTENANCE on the home just as a fully vested homeowner would?
3) Can you pay 3 to 10% option consideration up front to move into your dream home?
If you answered yes to these three questions, then you have taken the first important step to becoming a homeowner.
Don't let the economy, your friends or the media tell you that you can't have the American Dream, or that you have to wait. There is no need to defer your dreams; you can buy now!
At Happy Home Solutions, we help renters stop throwing their money away on rent by moving them into rent-to-own homes.
We just helped a couple from Cicero, Illinois move from a third-story walk-up apartment to a beautiful, 3 bedroom, fully rehabbed house in Waukegan, Illinois for a payment that is LESS EACH MONTH than they were paying in rent!
In my next post, I will provide a link of Marlena describing how excited she is to be purchasing her first home.
Let us help you be our next success story.
Contact Diane St. James at dianej-stjames@usa.net or 630-780-HOME to take that first step toward YOUR American Dream.
How Anyone Can Qualify For A Rent To Own Home
Many tenants continue to rent year after year -- and give their money to their landlord with nothing to show for it -- because they don't think they can qualify to buy a home.
But many of them are wrong. Many of them can qualify to rent-to-own a home -- even if their credit score is low, or they haven't saved a big down payment, or they are between jobs, or they don't have a long rental history.
It just takes a little action to find the right program, and a little education to learn how it works.
If you ask the right questions, you'll discover how simple the process really is.
Tenants ask all the time – How can I qualify for your rent-to-own program?
At Happy Home Solutions, you just need to fill out an application and satisfy three basic requirements:
1) The tenant-buyers must commit to paying their rent on time every month.
2) The tenant-buyers must be ready to handle the minor repairs and maintenance that come with owning a home.
3) The tenant-buyers must be able to provide an option fee, or upfront payment, before they move in.
You can watch a video explaining each of these in detail at www.MyHappyHomeSolutions.com
Tenants also ask – Why do I need a significant option fee? Why can't I just pay a deposit?
The down payment necessary to secure a home in our rent-to-own program varies drastically, depending on the price of the home, the condition of the property, the strength of the applicant's credit score and employment history and rental history, whether the rent is lower or higher than market rents in the area, and many other factors.
The upfront payment for a rent-to-own property is generally higher than a typical rental deposit of one or two month's rent but lower than a traditional down payment for a bank loan of 10% to 20% of the purchase price.
The more a tenant-buyer has available to put down, the more likely that tenant-buyer's application will be approved and selected over another tenant-buyer with similar income and credit. We have many applicants for each property, so the candidate who beats out the competition is often the one who can show the strongest commitment to purchase.
A significant upfront payment shows a strong desire to buy!
Tenants still ask -- Why is a down payment required even though my rent is being applied towards the down payment?
At Happy Home Solutions, our tenants earn a signficant portion of their rent payment towards the purchase of their home. Although this payment keeps growing every month, an upfront payment is still required before the tenant moves in to distinguish a true "tenant-buyer" from a regular renter, and to help with the process of acquiring a bank loan. We usually offer a very generous 50% to 100% rent credit because we want serious buyers who can combine that with a significant down payment in order to qualify for a loan.
Finally, tenants ask -- Would we need to qualify for a conventional loan after the lease period?
The idea of our rent-to-own program is to work towards getting a conventional loan during the lease period. We will refer you to professionals who can help you improve your credit, apply for grant assistance for additional down payment, research available loan programs, and get the best rate. We can often negotiate to get some of the closing costs paid for you as well.
We want to help you every step of the way because your success is our success!
Just listen to Marlena, by clicking on the following link:
http://www.youtube.com/watch?v=SIMIOqzMr_4
Marlena's dream came true when she found a newly remodeled house that cost less per month than her apartment and gave her more space, more convenience and more of what she always wanted -- her own home!
Let us help you achieve your goal. Just call 630-780-4663 or email dianejstjames@yahoo.com
or visit us at www.MyHappyHomeSolutions.com
But many of them are wrong. Many of them can qualify to rent-to-own a home -- even if their credit score is low, or they haven't saved a big down payment, or they are between jobs, or they don't have a long rental history.
It just takes a little action to find the right program, and a little education to learn how it works.
If you ask the right questions, you'll discover how simple the process really is.
Tenants ask all the time – How can I qualify for your rent-to-own program?
At Happy Home Solutions, you just need to fill out an application and satisfy three basic requirements:
1) The tenant-buyers must commit to paying their rent on time every month.
2) The tenant-buyers must be ready to handle the minor repairs and maintenance that come with owning a home.
3) The tenant-buyers must be able to provide an option fee, or upfront payment, before they move in.
You can watch a video explaining each of these in detail at www.MyHappyHomeSolutions.com
Tenants also ask – Why do I need a significant option fee? Why can't I just pay a deposit?
The down payment necessary to secure a home in our rent-to-own program varies drastically, depending on the price of the home, the condition of the property, the strength of the applicant's credit score and employment history and rental history, whether the rent is lower or higher than market rents in the area, and many other factors.
The upfront payment for a rent-to-own property is generally higher than a typical rental deposit of one or two month's rent but lower than a traditional down payment for a bank loan of 10% to 20% of the purchase price.
The more a tenant-buyer has available to put down, the more likely that tenant-buyer's application will be approved and selected over another tenant-buyer with similar income and credit. We have many applicants for each property, so the candidate who beats out the competition is often the one who can show the strongest commitment to purchase.
A significant upfront payment shows a strong desire to buy!
Tenants still ask -- Why is a down payment required even though my rent is being applied towards the down payment?
At Happy Home Solutions, our tenants earn a signficant portion of their rent payment towards the purchase of their home. Although this payment keeps growing every month, an upfront payment is still required before the tenant moves in to distinguish a true "tenant-buyer" from a regular renter, and to help with the process of acquiring a bank loan. We usually offer a very generous 50% to 100% rent credit because we want serious buyers who can combine that with a significant down payment in order to qualify for a loan.
Finally, tenants ask -- Would we need to qualify for a conventional loan after the lease period?
The idea of our rent-to-own program is to work towards getting a conventional loan during the lease period. We will refer you to professionals who can help you improve your credit, apply for grant assistance for additional down payment, research available loan programs, and get the best rate. We can often negotiate to get some of the closing costs paid for you as well.
We want to help you every step of the way because your success is our success!
Just listen to Marlena, by clicking on the following link:
http://www.youtube.com/watch?v=SIMIOqzMr_4
Marlena's dream came true when she found a newly remodeled house that cost less per month than her apartment and gave her more space, more convenience and more of what she always wanted -- her own home!
Let us help you achieve your goal. Just call 630-780-4663 or email dianejstjames@yahoo.com
or visit us at www.MyHappyHomeSolutions.com
A Happy Homes Solutions Rent to Own Client Testimonial
Marlena is a Happy Homes Solutions client who found a home through our online video tours, and is now renting to own her first home!
See what Marlena has to say about Happy Homes Solutions in this video:
See what Marlena has to say about Happy Homes Solutions in this video:
My 10 Dumbest Money Moves -- And How You Can Avoid Them
Here's another informative article we've found about managing your money and living a better life! You can't do it all, but just start doing a little every week!
by Stacy Johnson
Thursday, October 14, 2010
My 28-year-old niece and I were recently talking about money. She's (finally!) become interested in accumulating more and spending less, and because I've been in the personal finance business in one capacity or another since before she was born, she logically assumed that I've always done everything right and know exactly what to do at all times.
Confession time: I've blown it big on more occasions than I care to mention. In fact, most of what I've learned about money I didn't learn in books or by being a CPA, stock broker, or financial reporter. I learned it the hard way — by making stupid decisions and missing opportunities.
So for her sake, and maybe yours, I've put together the following list of 10 mistakes — most of which I've made — that you really should try to avoid.
1. Not having a goal
Whether sitting in your car or standing at the airport, you'd never start a trip without a destination in mind. The same logic applies to money. You should decide exactly what it is you'd like to accomplish, then remind yourself of that goal early and often. Are you trying to buy a house? Become self-employed? Save for your kid's college education? Retire in your 50s? Whatever it is, write it down, picture it and share it with anyone else who you're counting on to help you accomplish it. Your goal isn't money — money's paper. Create goals — both short-term and long-term — then decide how much money you'll need to reach them. Take it from someone who wandered aimlessly for years: goals work.
2. Not having a spending plan
If you have a job of any kind, you can bet that your employer tracks every dime they make and every dime they spend. Granted, they have an incentive to do so — both income and expenses affect their income taxes — but it's only logical to want to know where your money is coming from and where it's going.
Tracking and categorizing your expenses with a budget — or spending plan, as I prefer to call it — is the single greatest tool you have to accomplish your money-related goals. A plan that includes what you intend to spend on things like entertainment, food, housing, etc., vs. what you actually spend allows you to fine-tune your finances and find places to save. Not doing this is like driving with your eyes half-closed: You might reach your destination, but you're certainly going to take more time getting there.
If you're not writing down every penny of money coming in and money going out,
3. Attempting to derive self-esteem from possessions
Although we all know that money doesn't buy happiness, very few of us act that way. Instead, we seem to go out of our way to appear successful by driving the right car, living in the right house, and wearing the right clothes. Nothing wrong with nice things — if you can afford them.
But here's something that life has taught me. It's a quote from my most recent book, Life or Debt 2010: You can either look rich or be rich, but you probably won't live long enough to accomplish both.
Attempting to derive self-esteem from possessions is dumb on two counts. First, it's expensive.
More important? It doesn't work.
NOTE FROM HAPPY HOME SOLUTIONS: We can't tell you how many times we've gone in to clean up a property after a tenant has moved out, only to be amazed (and saddened/disgusted) at the purchases made -- and often left behind -- by people who couldn't seem to pay to keep a roof over their heads! A bunch of $100 shoes aren't going to do you any good if you're homeless -- especially if you charge them to your credit card, and then leave them behind when you you get evicted!
Almost all purchases except real estate go down in value over the long term (if not right away). Yes, real estate goes down sometimes too, but it ALWAYS goes back up.
The moral of the story is, if you're living in a $500 per month apartment, you shouldn't plan on throwing away money on a big screen TV and a different pair of Nikes for every day of the week (I've seen it done)!
I'm still watching the 25" TV I bought in '98 -- and it works just fine -- and so does the money I invested in real estate! Don't be dumb about material possessions.
4. Doing what everyone else is doing
One of the world's wealthiest men, Warren Buffett, said, "Be fearful when others are greedy; be greedy when others are fearful."
During the recession-induced stock market rout that began in the summer of 2008 and bottomed in March of 2009, the Dow Jones Industrial Average plunged all the way from 10,000 to 6,600. It was at that time that I bought most of the stocks I now own in my online portfolio. I didn't buy then because somebody on TV told me to — the "experts" were as fearful as everybody else. I bought then because I'd missed similar opportunities in similar downturns before, and I was determined to learn from that mistake this time.
Likewise, when the housing bubble was at its zenith, many of my friends were buying as many houses as they could possibly borrow for, even though it should have been apparent that prices were over-inflated. Now they're broke — and I'm shopping for real estate. Again, not because I'm smart, but because I've also missed that opportunity before. Hence this recent story Why You Should Buy Stocks and Houses Now.
It's common knowledge the economy runs is cycles of boom and bust — yet when times are good, everyone seems to believe that trees grow to the sky. When they're tough — like they are now — the same people stand like a deer in the headlights.
If you're convinced the economy is going to zero, buy guns and canned goods. But if you can reasonably expect a recovery some day, invest — even if that day is a long way away, and even if it's possible things could get worse before they get better.
5. Starting to save large and late rather than small and soon
If you're 25 and you save just 5 bucks every day ... call it $150 a month ... and earn 10 percent, by the time you're 55, you'll have $340,000.
If you wait till you're 45 to start accumulating that same 340 grand, you'll have to save $1,700 every month for 10 years. True, you can't earn 10 percent today, at least without risk.
But over time and by taking a measured amount of risk, you can.
6. Paying interest to buy things that drop in value
There are only two situations where paying interest makes sense, at least mathematically. The first is when the purchase goes up in value at a rate greater than the rate of interest you're paying to finance it. Example: You borrow money at 5 percent to finance real estate that you think might return 8 percent on your overall investment. Other examples might include a business loan or a student loan — in other words, something that's going to return more (at least potentially) than it costs in interest payments.
The other situation where paying interest makes sense is when you can earn more on your cash than you're paying in interest. Example: After taxes, I'm only paying about 3.5 percent to finance my house. Since I think can make more than 3.5 percent after-tax in the stock market, I'll forgo paying off the mortgage, even though I have the cash.
Obviously there are times when we have no choice but to borrow. The point is that unless the math works out, the less you borrow, the better.
7. Turning down free money
If your employer is offering matching money when you participate in your company's 401k or other retirement plan — and you're not participating to the extent necessary to get the full match — you're literally refusing free money, not to mention ignoring an opportunity to get a tax deduction and grow your retirement savings tax-deferred.
There are only two kinds of people who turn down free money: people who really, truly can't afford to put up the money to get the match, and people who aren't thinking it through.
And yes, I've been one of those people.
8. Buying a new car
Everyone knows that cars drop 15-25 percent before you get them home from the showroom. Which makes it odd that so many people continue to buy one. My girlfriend just bought a 2009 BMW that still smells new for $26,000 — about $7,000 less than a new one would cost, and they look pretty much identical.
This is one mistake I can happily say I haven't made — I've never spent even that much on a car — or owned one that new.
If you're buying a car for transportation, it doesn't have to be either new or fancy. Cars are depreciating assets: the less you spend on one the better, especially if you're borrowing money to do it.
9. Buying more house than you need or can afford
It's practically gospel: spend 25 percent of your gross income on a mortgage, regardless of what size house you really need. While spending the maximum possible amount you can afford will make real estate agents happy, will it make you happy? When you buy more square feet than you're going to actually live in, you're required to insure them, furnish them, clean them, heat them, and cool them. All of that costs money, time and stress.
Buying a big house makes sense if you're trying to make a leveraged bet on the future of housing prices — or if you're trying to impress your friends.
If you're not doing either, buy what you need and put the money you save into more productive things, like meeting your financial goals.
10. Not protecting your good credit
Credit is like lots of things in life: simple to screw up, a bear to fix. And even though you may think it doesn't matter, some day it might, and probably will. If you've already messed up your credit, take the time and steps necessary to fix it and then keep in good shape.
That was my list of dumb moves to avoid, but I'll bet there are plenty of things that you could add. So let's hear it!
by Stacy Johnson
Thursday, October 14, 2010
My 28-year-old niece and I were recently talking about money. She's (finally!) become interested in accumulating more and spending less, and because I've been in the personal finance business in one capacity or another since before she was born, she logically assumed that I've always done everything right and know exactly what to do at all times.
Confession time: I've blown it big on more occasions than I care to mention. In fact, most of what I've learned about money I didn't learn in books or by being a CPA, stock broker, or financial reporter. I learned it the hard way — by making stupid decisions and missing opportunities.
So for her sake, and maybe yours, I've put together the following list of 10 mistakes — most of which I've made — that you really should try to avoid.
1. Not having a goal
Whether sitting in your car or standing at the airport, you'd never start a trip without a destination in mind. The same logic applies to money. You should decide exactly what it is you'd like to accomplish, then remind yourself of that goal early and often. Are you trying to buy a house? Become self-employed? Save for your kid's college education? Retire in your 50s? Whatever it is, write it down, picture it and share it with anyone else who you're counting on to help you accomplish it. Your goal isn't money — money's paper. Create goals — both short-term and long-term — then decide how much money you'll need to reach them. Take it from someone who wandered aimlessly for years: goals work.
2. Not having a spending plan
If you have a job of any kind, you can bet that your employer tracks every dime they make and every dime they spend. Granted, they have an incentive to do so — both income and expenses affect their income taxes — but it's only logical to want to know where your money is coming from and where it's going.
Tracking and categorizing your expenses with a budget — or spending plan, as I prefer to call it — is the single greatest tool you have to accomplish your money-related goals. A plan that includes what you intend to spend on things like entertainment, food, housing, etc., vs. what you actually spend allows you to fine-tune your finances and find places to save. Not doing this is like driving with your eyes half-closed: You might reach your destination, but you're certainly going to take more time getting there.
If you're not writing down every penny of money coming in and money going out,
3. Attempting to derive self-esteem from possessions
Although we all know that money doesn't buy happiness, very few of us act that way. Instead, we seem to go out of our way to appear successful by driving the right car, living in the right house, and wearing the right clothes. Nothing wrong with nice things — if you can afford them.
But here's something that life has taught me. It's a quote from my most recent book, Life or Debt 2010: You can either look rich or be rich, but you probably won't live long enough to accomplish both.
Attempting to derive self-esteem from possessions is dumb on two counts. First, it's expensive.
More important? It doesn't work.
NOTE FROM HAPPY HOME SOLUTIONS: We can't tell you how many times we've gone in to clean up a property after a tenant has moved out, only to be amazed (and saddened/disgusted) at the purchases made -- and often left behind -- by people who couldn't seem to pay to keep a roof over their heads! A bunch of $100 shoes aren't going to do you any good if you're homeless -- especially if you charge them to your credit card, and then leave them behind when you you get evicted!
Almost all purchases except real estate go down in value over the long term (if not right away). Yes, real estate goes down sometimes too, but it ALWAYS goes back up.
The moral of the story is, if you're living in a $500 per month apartment, you shouldn't plan on throwing away money on a big screen TV and a different pair of Nikes for every day of the week (I've seen it done)!
I'm still watching the 25" TV I bought in '98 -- and it works just fine -- and so does the money I invested in real estate! Don't be dumb about material possessions.
4. Doing what everyone else is doing
One of the world's wealthiest men, Warren Buffett, said, "Be fearful when others are greedy; be greedy when others are fearful."
During the recession-induced stock market rout that began in the summer of 2008 and bottomed in March of 2009, the Dow Jones Industrial Average plunged all the way from 10,000 to 6,600. It was at that time that I bought most of the stocks I now own in my online portfolio. I didn't buy then because somebody on TV told me to — the "experts" were as fearful as everybody else. I bought then because I'd missed similar opportunities in similar downturns before, and I was determined to learn from that mistake this time.
Likewise, when the housing bubble was at its zenith, many of my friends were buying as many houses as they could possibly borrow for, even though it should have been apparent that prices were over-inflated. Now they're broke — and I'm shopping for real estate. Again, not because I'm smart, but because I've also missed that opportunity before. Hence this recent story Why You Should Buy Stocks and Houses Now.
It's common knowledge the economy runs is cycles of boom and bust — yet when times are good, everyone seems to believe that trees grow to the sky. When they're tough — like they are now — the same people stand like a deer in the headlights.
If you're convinced the economy is going to zero, buy guns and canned goods. But if you can reasonably expect a recovery some day, invest — even if that day is a long way away, and even if it's possible things could get worse before they get better.
5. Starting to save large and late rather than small and soon
If you're 25 and you save just 5 bucks every day ... call it $150 a month ... and earn 10 percent, by the time you're 55, you'll have $340,000.
If you wait till you're 45 to start accumulating that same 340 grand, you'll have to save $1,700 every month for 10 years. True, you can't earn 10 percent today, at least without risk.
But over time and by taking a measured amount of risk, you can.
6. Paying interest to buy things that drop in value
There are only two situations where paying interest makes sense, at least mathematically. The first is when the purchase goes up in value at a rate greater than the rate of interest you're paying to finance it. Example: You borrow money at 5 percent to finance real estate that you think might return 8 percent on your overall investment. Other examples might include a business loan or a student loan — in other words, something that's going to return more (at least potentially) than it costs in interest payments.
The other situation where paying interest makes sense is when you can earn more on your cash than you're paying in interest. Example: After taxes, I'm only paying about 3.5 percent to finance my house. Since I think can make more than 3.5 percent after-tax in the stock market, I'll forgo paying off the mortgage, even though I have the cash.
Obviously there are times when we have no choice but to borrow. The point is that unless the math works out, the less you borrow, the better.
7. Turning down free money
If your employer is offering matching money when you participate in your company's 401k or other retirement plan — and you're not participating to the extent necessary to get the full match — you're literally refusing free money, not to mention ignoring an opportunity to get a tax deduction and grow your retirement savings tax-deferred.
There are only two kinds of people who turn down free money: people who really, truly can't afford to put up the money to get the match, and people who aren't thinking it through.
And yes, I've been one of those people.
8. Buying a new car
Everyone knows that cars drop 15-25 percent before you get them home from the showroom. Which makes it odd that so many people continue to buy one. My girlfriend just bought a 2009 BMW that still smells new for $26,000 — about $7,000 less than a new one would cost, and they look pretty much identical.
This is one mistake I can happily say I haven't made — I've never spent even that much on a car — or owned one that new.
If you're buying a car for transportation, it doesn't have to be either new or fancy. Cars are depreciating assets: the less you spend on one the better, especially if you're borrowing money to do it.
9. Buying more house than you need or can afford
It's practically gospel: spend 25 percent of your gross income on a mortgage, regardless of what size house you really need. While spending the maximum possible amount you can afford will make real estate agents happy, will it make you happy? When you buy more square feet than you're going to actually live in, you're required to insure them, furnish them, clean them, heat them, and cool them. All of that costs money, time and stress.
Buying a big house makes sense if you're trying to make a leveraged bet on the future of housing prices — or if you're trying to impress your friends.
If you're not doing either, buy what you need and put the money you save into more productive things, like meeting your financial goals.
10. Not protecting your good credit
Credit is like lots of things in life: simple to screw up, a bear to fix. And even though you may think it doesn't matter, some day it might, and probably will. If you've already messed up your credit, take the time and steps necessary to fix it and then keep in good shape.
That was my list of dumb moves to avoid, but I'll bet there are plenty of things that you could add. So let's hear it!
Why You Should Buy Stocks and Houses Now
Here is another Yahoo Finance article, written by financial expert Stacy Johnson, that I find informative and inspiring -- especially the part about buying houses!
Because it was a very long article, I've just cut to the chase and reprinted the part about real estate here (and yes, I've got some stock investments -- old 401k accounts going almost nowhere.)
I'm not real big on stock investing, in part because real estate has so many advantages over stocks. One of the most important is, when you invest in real estate, banks (or other lenders) will lend you money to buy property. No one will lend you money to buy stocks. This is called leveraging.
Eventually, you make a profit on the appreciation -- on money you borrowed! Since you can't borrow money to buy stocks, you cannot make a profit on borrowed money in stocks the way you can on real estate.
There's a whole bunch of other great reasons to favor real estate over stocks, such as the serious tax advantages of real estate over stocks -- but the leveraging thing may be the single most obvious advantage to buying real estate over stocks.
Also note, the following article refers to house-buying as an investment. It is an investment -- a good investment -- in your long term wealth. While the article author -- and myself -- have invested in rental properties, his opinion on why now is a great time to buy real estate (even if you're buying through a Rent to Own program) still makes the same sense: Now is a great time to buy real estate!
But check out what Stacy has to say:
By Stacy Johnson
With banks paying historically low interest rates – in many cases less than 1% – they certainly doesn’t seem to be a good place for your long term savings. At least until you compare them to the stock market, where doubts about the economy are keeping prices depressed.
Then there’s housing. While prices have shown signs of stabilizing in some parts of the country, foreclosures in other parts make investing in real estate equally unnerving.
I’ve been investing in stocks, bonds and real estate for more than 30 years. For about 10 of those years I was a stock broker for three major Wall Street firms, so this is a block I’ve been around. I also put my money where my mouth is, because I disclose exactly what I’m buying and what I own.
While I can’t tell you what’s going to happen in the next few months, I’m not afraid to make some long-term bets. Nor am I afraid to show you exactly where I’m putting my money to work today.
Real Estate – My two-year prediction: Higher, especially in hardest-hit and hardest-to-build markets.
In addition to owning several houses over the years, I’ve also owned rental properties and a portion of a partnership that developed raw land. While real estate has historically averaged about the same return as stocks over the long-term, I’d guess that I’ve made more money from real estate during my investing life than I have from stocks.
Real estate is much more difficult to discuss than homogeneous investments like stocks. In other words, 100 shares of IBM is the same whether you’re buying it in Boston or Beijing. But housing markets are local. If you live in an area of growing employment opportunities, your profits will almost certainly be higher than if you buy in shrinking cities with high unemployment.
I paid $440,000 when I bought my Fort Lauderdale waterfront home back in 2001. As the market peaked in 2007, it was worth more than a million dollars. At the height of the bubble, I knew many people who were buying houses and flipping them: holding a house or condo for a few months, then selling it for more than they paid for it. The mantra at the time was “You can’t go wrong because housing prices always go up and everybody wants to live in Florida.” But I didn’t participate in the frenzy by buying additional houses. Why? Having been around the investing block a time or two, I used the same logic that applies to any investment: whenever you hear the words “you can’t go wrong” things are about to go terribly wrong. And, of course that’s exactly what happened.
My house is now worth something south of $500,000; maybe as little as I paid for it in 2001. Many friends who were speculating on housing were wiped out. Needless to say, none are buying houses today.
Too bad. Because today, buying a house in South Florida is a good idea, and an even better idea in other parts of the country.
Nationwide, we need about 1.5 million new houses a year to accommodate new households being formed and to replace old houses that are lost to fire, flood, age, etc. The annualized rate of homes being built however, was only about 700,000 in April, and less than 330,000 in May: the lowest number ever recorded and around 20% of what’s needed. Result? Sooner or later the pent-up demand for houses will materialize as higher housing prices. As to when that will occur, it will happen when the economy improves, unemployment begins to recede, mortgage money becomes more readily available, and the huge inventory of foreclosures is worked off, especially in bubble states like Florida, Arizona, California and Nevada.
What do you do when an investment with long-term promise has a short-term crash? Whether you’re talking stocks or real estate, the answer is the same: if you have long-term money available, you buy more.
As I said above, it’s possible the world has changed. It’s possible that houses will never again appreciate. That’s the guns-and-canned-food-great-depression scenario. But if you believe that housing will return to the historical mean of gentle annual appreciation in the 5%-7% range, logic would suggest that buying at 2001 prices would make a lot of sense.
I have yet to buy any more houses – the only real estate I currently own is my home and a bit of vacant commercial property in Arizona – but I’m looking into foreclosures in Fort Lauderdale. Buying real estate isn’t nearly as simple as buying stocks and requires a great deal more research, not to mention a great deal of cash [note from Happy Home Solutions -- not if you buy through a Rent to Own program!].
If you’re buying foreclosures, no mortgages are allowed; you have to write a check for the full amount. I’m simply too busy at present to devote the time necessary to buy more real estate, but then again, I’m not in a huge rush. I doubt the stock market is going to take off tomorrow – neither is the housing market.
Best place to buy a house or other real estate? In the formal bubble markets mentioned above where housing has been over-sold and foreclosures are plentiful, or in fully developed cities where employment is rising and space for new homes is at a premium, like New York City, San Francisco and Seattle.
Interest Rates – My two-year prediction: Twice as high as today.
Interest rates are historically low. As with stocks and real estate, I feel that the path of least resistance is up, especially when looking a couple of years out.
If I’m right, those predicting a double-dip recession will be wrong and the economy will continue recovering. As the economy improves, demand for loans will improve with it from all sectors: consumers will borrow for cars and houses, businesses will borrow to expand and the government will borrow to finance its ballooning deficit. Increased demand for borrowed money means higher interest rates.
If you own bonds, higher interest rates are dangerous, because bond prices move inversely with interest rates. In other words, higher rates mean bonds you own today will decline in value. You want to own bonds when rates are falling, not rising.
If you’re keeping money in the bank or money market mutual funds, higher interest rates are obviously a good thing. So if I were keeping money in ultra-safe investments like bonds or CDs, I’d resist the temptation to chase a little extra interest by investing long-term and stick to short-term savings so you’ll be ready to lock in higher rates down the road.
As with stocks and real estate, this prediction depends on the economy improving. If we’re instead on the verge of another Great Depression, interest rates will stay low or perhaps even go lower – although on many investments they’re already close to zero.
That’s it: now I’ve recorded my predictions for all the world to see. Now all we have to do is wait two years, take a look back and see if they were accurate.
Because it was a very long article, I've just cut to the chase and reprinted the part about real estate here (and yes, I've got some stock investments -- old 401k accounts going almost nowhere.)
I'm not real big on stock investing, in part because real estate has so many advantages over stocks. One of the most important is, when you invest in real estate, banks (or other lenders) will lend you money to buy property. No one will lend you money to buy stocks. This is called leveraging.
Eventually, you make a profit on the appreciation -- on money you borrowed! Since you can't borrow money to buy stocks, you cannot make a profit on borrowed money in stocks the way you can on real estate.
There's a whole bunch of other great reasons to favor real estate over stocks, such as the serious tax advantages of real estate over stocks -- but the leveraging thing may be the single most obvious advantage to buying real estate over stocks.
Also note, the following article refers to house-buying as an investment. It is an investment -- a good investment -- in your long term wealth. While the article author -- and myself -- have invested in rental properties, his opinion on why now is a great time to buy real estate (even if you're buying through a Rent to Own program) still makes the same sense: Now is a great time to buy real estate!
But check out what Stacy has to say:
By Stacy Johnson
With banks paying historically low interest rates – in many cases less than 1% – they certainly doesn’t seem to be a good place for your long term savings. At least until you compare them to the stock market, where doubts about the economy are keeping prices depressed.
Then there’s housing. While prices have shown signs of stabilizing in some parts of the country, foreclosures in other parts make investing in real estate equally unnerving.
I’ve been investing in stocks, bonds and real estate for more than 30 years. For about 10 of those years I was a stock broker for three major Wall Street firms, so this is a block I’ve been around. I also put my money where my mouth is, because I disclose exactly what I’m buying and what I own.
While I can’t tell you what’s going to happen in the next few months, I’m not afraid to make some long-term bets. Nor am I afraid to show you exactly where I’m putting my money to work today.
Real Estate – My two-year prediction: Higher, especially in hardest-hit and hardest-to-build markets.
In addition to owning several houses over the years, I’ve also owned rental properties and a portion of a partnership that developed raw land. While real estate has historically averaged about the same return as stocks over the long-term, I’d guess that I’ve made more money from real estate during my investing life than I have from stocks.
Real estate is much more difficult to discuss than homogeneous investments like stocks. In other words, 100 shares of IBM is the same whether you’re buying it in Boston or Beijing. But housing markets are local. If you live in an area of growing employment opportunities, your profits will almost certainly be higher than if you buy in shrinking cities with high unemployment.
I paid $440,000 when I bought my Fort Lauderdale waterfront home back in 2001. As the market peaked in 2007, it was worth more than a million dollars. At the height of the bubble, I knew many people who were buying houses and flipping them: holding a house or condo for a few months, then selling it for more than they paid for it. The mantra at the time was “You can’t go wrong because housing prices always go up and everybody wants to live in Florida.” But I didn’t participate in the frenzy by buying additional houses. Why? Having been around the investing block a time or two, I used the same logic that applies to any investment: whenever you hear the words “you can’t go wrong” things are about to go terribly wrong. And, of course that’s exactly what happened.
My house is now worth something south of $500,000; maybe as little as I paid for it in 2001. Many friends who were speculating on housing were wiped out. Needless to say, none are buying houses today.
Too bad. Because today, buying a house in South Florida is a good idea, and an even better idea in other parts of the country.
Nationwide, we need about 1.5 million new houses a year to accommodate new households being formed and to replace old houses that are lost to fire, flood, age, etc. The annualized rate of homes being built however, was only about 700,000 in April, and less than 330,000 in May: the lowest number ever recorded and around 20% of what’s needed. Result? Sooner or later the pent-up demand for houses will materialize as higher housing prices. As to when that will occur, it will happen when the economy improves, unemployment begins to recede, mortgage money becomes more readily available, and the huge inventory of foreclosures is worked off, especially in bubble states like Florida, Arizona, California and Nevada.
What do you do when an investment with long-term promise has a short-term crash? Whether you’re talking stocks or real estate, the answer is the same: if you have long-term money available, you buy more.
As I said above, it’s possible the world has changed. It’s possible that houses will never again appreciate. That’s the guns-and-canned-food-great-depression scenario. But if you believe that housing will return to the historical mean of gentle annual appreciation in the 5%-7% range, logic would suggest that buying at 2001 prices would make a lot of sense.
I have yet to buy any more houses – the only real estate I currently own is my home and a bit of vacant commercial property in Arizona – but I’m looking into foreclosures in Fort Lauderdale. Buying real estate isn’t nearly as simple as buying stocks and requires a great deal more research, not to mention a great deal of cash [note from Happy Home Solutions -- not if you buy through a Rent to Own program!].
If you’re buying foreclosures, no mortgages are allowed; you have to write a check for the full amount. I’m simply too busy at present to devote the time necessary to buy more real estate, but then again, I’m not in a huge rush. I doubt the stock market is going to take off tomorrow – neither is the housing market.
Best place to buy a house or other real estate? In the formal bubble markets mentioned above where housing has been over-sold and foreclosures are plentiful, or in fully developed cities where employment is rising and space for new homes is at a premium, like New York City, San Francisco and Seattle.
Interest Rates – My two-year prediction: Twice as high as today.
Interest rates are historically low. As with stocks and real estate, I feel that the path of least resistance is up, especially when looking a couple of years out.
If I’m right, those predicting a double-dip recession will be wrong and the economy will continue recovering. As the economy improves, demand for loans will improve with it from all sectors: consumers will borrow for cars and houses, businesses will borrow to expand and the government will borrow to finance its ballooning deficit. Increased demand for borrowed money means higher interest rates.
If you own bonds, higher interest rates are dangerous, because bond prices move inversely with interest rates. In other words, higher rates mean bonds you own today will decline in value. You want to own bonds when rates are falling, not rising.
If you’re keeping money in the bank or money market mutual funds, higher interest rates are obviously a good thing. So if I were keeping money in ultra-safe investments like bonds or CDs, I’d resist the temptation to chase a little extra interest by investing long-term and stick to short-term savings so you’ll be ready to lock in higher rates down the road.
As with stocks and real estate, this prediction depends on the economy improving. If we’re instead on the verge of another Great Depression, interest rates will stay low or perhaps even go lower – although on many investments they’re already close to zero.
That’s it: now I’ve recorded my predictions for all the world to see. Now all we have to do is wait two years, take a look back and see if they were accurate.
Even the Mega-Rich Rent to Own their Dream Homes!
Why Do Even the Mega-Rich Often Rent to Own Their Homes? Because it Makes Sense. On many levels.
* Get to experience the home and the neighborhood before you commit to the actual purchase.
* Instead of just throwing away money on rent, which you will never get back, you can apply part -- or sometimes even ALL -- of your rent payments toward the purchase price of the home, helping you build up the down payment amount mortgage brokers and banks will require you to put down before they give you a loan. Is there any other way you are going to save up $10,000 or $20,000 or more?
Here's a Rent to Own success story about the former President of Facebook (now a mega-rich investment fund director, and founder of the newly popular music-sharing website, Spotify) and how he rented his new $20 million dollar home from some other mega-rich person before finally making the purchase,
Sean Parker, Spotify and Founder's Fund
Location: New York
Cost: $20 million
Bedrooms: 6
Bathrooms: 7 full, 1 half
Square footage: 7,500
Sean Parker disputes his bad boy portrayal by Justin Timberlake in the 2010 film "The Social Network." But the former Facebook president and Napster co-founder is certainly living it up in his new home, a $20 million West Village townhouse known as the Bacchus House.
Formerly owned by Italian liquor heir Enrico Cinzano, it includes an indoor pool and gym, garage, theater, a chef's kitchen and an elevator.
Parker, now a managing director at the Founders Fund, a San Francisco venture capital firm, and a director of Spotify, an online music service, PURCHASED THE HOME LAST YEAR, AFTER RENTING IT FOR SOME TIME, and throwing his share of over-the-top parties.
Call us at 630-697-4500 and we'll help you rent to own your dream home too!
Adam and Diane St. James
MyHappyHomeSolutions.com
* Get to experience the home and the neighborhood before you commit to the actual purchase.
* Instead of just throwing away money on rent, which you will never get back, you can apply part -- or sometimes even ALL -- of your rent payments toward the purchase price of the home, helping you build up the down payment amount mortgage brokers and banks will require you to put down before they give you a loan. Is there any other way you are going to save up $10,000 or $20,000 or more?
Here's a Rent to Own success story about the former President of Facebook (now a mega-rich investment fund director, and founder of the newly popular music-sharing website, Spotify) and how he rented his new $20 million dollar home from some other mega-rich person before finally making the purchase,
Sean Parker, Spotify and Founder's Fund
Location: New York
Cost: $20 million
Bedrooms: 6
Bathrooms: 7 full, 1 half
Square footage: 7,500
Sean Parker disputes his bad boy portrayal by Justin Timberlake in the 2010 film "The Social Network." But the former Facebook president and Napster co-founder is certainly living it up in his new home, a $20 million West Village townhouse known as the Bacchus House.
Formerly owned by Italian liquor heir Enrico Cinzano, it includes an indoor pool and gym, garage, theater, a chef's kitchen and an elevator.
Parker, now a managing director at the Founders Fund, a San Francisco venture capital firm, and a director of Spotify, an online music service, PURCHASED THE HOME LAST YEAR, AFTER RENTING IT FOR SOME TIME, and throwing his share of over-the-top parties.
Call us at 630-697-4500 and we'll help you rent to own your dream home too!
Adam and Diane St. James
MyHappyHomeSolutions.com
Major Investment Expert Says the Time to Buy Houses is NOW!
One of our local realtors recently wrote an article quoting a major investment expert, a former Goldman Sachs investment banker -- and the man who wrote two books predicting the real estate bubble, and it's burst...
Woodridge Realtor Elena Taylor knows it, and you should too -- with home prices at their lowest levels in 10 years, and mortgage rates at their lowest levels just about ever -- now is the time to buy.
And if you aren't quite ready to take advantage of this rare economic situation right now, then take a few minutes to investigate the Rent to Own option. Call us at 630-697-4500 to discuss.
Read Elena's article here:
Goldman Sachs Investor Says Buy or Refi a Home NOW!
Woodridge Realtor Elena Taylor knows it, and you should too -- with home prices at their lowest levels in 10 years, and mortgage rates at their lowest levels just about ever -- now is the time to buy.
And if you aren't quite ready to take advantage of this rare economic situation right now, then take a few minutes to investigate the Rent to Own option. Call us at 630-697-4500 to discuss.
Read Elena's article here:
Goldman Sachs Investor Says Buy or Refi a Home NOW!
What Are The Advantages of Renting to Own My Next Home?
Whether you call it Rent to Own, or "lease-purchase" or "lease-option" or "lease with an option to buy," it can make good sense to acquire your next home using this technique.
Whether it is your dream home we're talking about, or maybe just your "starter" or "re-starter" home, Rent to Own has many advantages for the buyer.
Among them:
* Low Down Payment to Get Into the Property. You won't need nearly as much to initiate making this your home long-term as you would if you were just buying it today. Instead, you can put down a lesser amount now, and then build on that over time, especially when you...
* Receive Rent Credit Toward The Purchase Price. The amount and terms vary from home to home, but almost all rent to own properties allow you to apply some (sometimes even all) of your rent toward the purchase price of the home.
Many mortgage brokers and banks will consider this your "down payment" when considering your loan application, so it allows you to build up potentially tens of thousands of dollars you would otherwise have simply spent on rent, with no long-term benefit to you and your family's financial future. How else are you ever going to save that much money? Most people never do.
Don't throw your hard-earned money away on rent -- once you pay the rent, that money is gone forever. With Rent to Own, that money can still work toward your future financial security.
Rent to Own homes are not always easy to find, but we've always got several available. Call us at 630-697-4500 and we'll help you find a Rent to Own home of your own!
Adam and Diane St. James
MyHappyHomeSolutions.com
Whether it is your dream home we're talking about, or maybe just your "starter" or "re-starter" home, Rent to Own has many advantages for the buyer.
Among them:
* Low Down Payment to Get Into the Property. You won't need nearly as much to initiate making this your home long-term as you would if you were just buying it today. Instead, you can put down a lesser amount now, and then build on that over time, especially when you...
* Receive Rent Credit Toward The Purchase Price. The amount and terms vary from home to home, but almost all rent to own properties allow you to apply some (sometimes even all) of your rent toward the purchase price of the home.
Many mortgage brokers and banks will consider this your "down payment" when considering your loan application, so it allows you to build up potentially tens of thousands of dollars you would otherwise have simply spent on rent, with no long-term benefit to you and your family's financial future. How else are you ever going to save that much money? Most people never do.
Don't throw your hard-earned money away on rent -- once you pay the rent, that money is gone forever. With Rent to Own, that money can still work toward your future financial security.
Rent to Own homes are not always easy to find, but we've always got several available. Call us at 630-697-4500 and we'll help you find a Rent to Own home of your own!
Adam and Diane St. James
MyHappyHomeSolutions.com
What Are The Advantages of Renting to Own My Next Home? Part 2
There are many advantages to Renting to Own over simply renting. We outlined two -- lower down payment and earning rent credit toward the purchase price -- in a previous post.
Here are two more advantages:
* Qualifications Not As Strict as in Conventional Financing. Your credit score and other such factors are not as important when renting to own as they are when you purchase with a conventional mortgage. In fact, most Rent to Own buyers are in the process of credit repair while renting to own. You can earn rent credit toward the purchase price while you repair your credit, and then qualify for a mortgage a year or two down the road -- but having earned thousands or tens of thousands in rent credit toward the home which you otherwise would have lost in rent money.
* Past Credit Problems Not a Roadblock. Bankruptcy, foreclosure, short sale, collections from medical bills... You will have a tough time getting a conventional loan for quite a while with these on your credit report. Fortunately, with rent to own, you can begin earning money toward the purchase of the home while you work at resolution of some of these credit trouble spots, or while you let time erase some of them.
We can recommend credit repair specialists and programs -- or even mortgage brokers who specialize in working with credit repair -- to help you clean up your reports, all while you are putting your rent money to work toward the purchase of your next home.
Call us at 630-697-4500 and we'll help you get out of the rental road to financial ruin.
See Rent to Own properties we have available and join our email list at MyHappyHomeSolutions.com
Here are two more advantages:
* Qualifications Not As Strict as in Conventional Financing. Your credit score and other such factors are not as important when renting to own as they are when you purchase with a conventional mortgage. In fact, most Rent to Own buyers are in the process of credit repair while renting to own. You can earn rent credit toward the purchase price while you repair your credit, and then qualify for a mortgage a year or two down the road -- but having earned thousands or tens of thousands in rent credit toward the home which you otherwise would have lost in rent money.
* Past Credit Problems Not a Roadblock. Bankruptcy, foreclosure, short sale, collections from medical bills... You will have a tough time getting a conventional loan for quite a while with these on your credit report. Fortunately, with rent to own, you can begin earning money toward the purchase of the home while you work at resolution of some of these credit trouble spots, or while you let time erase some of them.
We can recommend credit repair specialists and programs -- or even mortgage brokers who specialize in working with credit repair -- to help you clean up your reports, all while you are putting your rent money to work toward the purchase of your next home.
Call us at 630-697-4500 and we'll help you get out of the rental road to financial ruin.
See Rent to Own properties we have available and join our email list at MyHappyHomeSolutions.com
What Are The Advantages of Renting to Own My Next Home? Part 3
The list of advantages to the buyer of Renting to Own goes on and on. We've outlined several in previous posts.
Here are two more advantages:
* The Money You Put Down is Fully Credited Toward the Purchase Price. The money you put down toward a Rent to Own -- typically between three and five percent of the purchase price of the home -- is 100 percent credited toward the purchase price.
* Your Rent Money Is Working For You, For A Change. Instead of just securing your landlord's financial future by paying his rent, some or all of your rent money actually goes toward the purchase price -- and the equity -- of your home! Once you pay rent on a straight rental, that money has left your life forever.
But when you pay rent on a Rent to Own home, part or all of the rent you pay is credited toward the purchase price of the home. Many banks or mortgage brokers will consider this your "down payment" on the home. IN our current economy, unless you have pristine credit AND 25 to 30 percent to put down on a home, no one is going to give you a mortgage. So how are you ever going to save up that down payment money? By earning Rent Credit while you Rent to Own. There is no better way.
Rent credit varies from home to home, but we can help you earn thousands of dollars toward the purchase of your next home through our easy to qualify Rent to Own program.
Call us at 630-697-4500 and we'll help you make your rent money work for you instead of against you.
See Rent to Own properties we have available and join our email list at MyHappyHomeSolutions.com
Here are two more advantages:
* The Money You Put Down is Fully Credited Toward the Purchase Price. The money you put down toward a Rent to Own -- typically between three and five percent of the purchase price of the home -- is 100 percent credited toward the purchase price.
* Your Rent Money Is Working For You, For A Change. Instead of just securing your landlord's financial future by paying his rent, some or all of your rent money actually goes toward the purchase price -- and the equity -- of your home! Once you pay rent on a straight rental, that money has left your life forever.
But when you pay rent on a Rent to Own home, part or all of the rent you pay is credited toward the purchase price of the home. Many banks or mortgage brokers will consider this your "down payment" on the home. IN our current economy, unless you have pristine credit AND 25 to 30 percent to put down on a home, no one is going to give you a mortgage. So how are you ever going to save up that down payment money? By earning Rent Credit while you Rent to Own. There is no better way.
Rent credit varies from home to home, but we can help you earn thousands of dollars toward the purchase of your next home through our easy to qualify Rent to Own program.
Call us at 630-697-4500 and we'll help you make your rent money work for you instead of against you.
See Rent to Own properties we have available and join our email list at MyHappyHomeSolutions.com
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