Real estate agents always advise buying rather than renting. But what if you can never afford down payment?

You know. Living check to check in an area where the average home price is $275,000. Poverty is what keeps folks in apartments. Never being able to save enough to get that cash for down payments and hefty mortgage payments. I know, you shouldn't make your landlord rich. I've heard it 1,000 times. But I don't think people actually want to make their landlord rich by choice.Real estate agents always advise buying rather than renting. But what if you can never afford down payment?
I rent a house for about half of what my costs would be if I bought it, and I am not poor. I don't live check to check either. I save the difference and am planning on buying a house for cash in a cheaper part of the country when I retire.





If you can't save, you are living at or above your means and need to cut back.Real estate agents always advise buying rather than renting. But what if you can never afford down payment?
People with good financial sense know that renting is a dead end. How do you get from renting to buying?





1. Never buy anything on a credit card that you can't pay off completely when you get the next statement unless it is a life or death situation.





2. Don't buy new cars. Newer used cars are a much better value. Reliability and gas mileage are first priorities in choice.





3. Trim down your repeat expenses. Do you really need caller ID on your phone? How much do you spend on cable tv each month? Do you eat fast food for lunch each day when you could be bringing lunch? Do you smoke? Take a good look at all your bills that come in monthly and find ways to trim them down.





4. Start off small. It's much better to be BUYing a 800 sq ft condo than renting a 1100 sq ft apartment. You can sell it later to trade up. Location is everything. A place in the getto is going to cost more than one that isn't because of neighborhood crime and eventual re-sale value when you upgrade.





5. Sweat equity. Is there a place with SURFACE damage that you can fix up? It might help you get a deal on the price. A dump that needs structural work or all new appliances does not qualify. A place with a bad landscape that you can improve does.





6. Look for an opportunity to BE THE LANDLORD. Can you buy a 2 br place and rent out one room? Can you buy a duplex?





7. Learn about taxes and save the right documentation in an ORGANIZED file.





8. Make your savings hard to access. It's better to have a savings account at a credit union with hours that make it closed when you are available to go there. Then use automatic deposit to save for your down payment.





9. Learn about credit scores and make yours good. Your mortgage rate will be a function of your credit score. If you don't pay your creditors, you will pay a lot more interest on any loans you have.
My partner and I went to Wells Fargo bank, zero down. $3,000 closing costs. It took some work to find a banker to work with us, but you can find them.


We now have a new 3 bedroom condo-1300 square feet. Keep searching, it can be done.
I understand what your saying but they have a lot of first time homeowner programs some where you need little or no money down. I've learned as long as your credit is good you can pretty much get whatever you want whether you can afford to pay for it or not. Hence why so many houses are being foreclosed on now!
Look into housing programs in your area, there are several government funded first time buyer programs and check with your bank...it might meet a higher interest rate to begin with but it could help you get started. Talk with these real estate agents...they want to sell more than you want to buy, and they know the business; they can give you ideas on how to get started. And just because you take their advise doesn't mean you have to buy a house from them...buy owner sales are usually several thousand less than the same place sold by a realtor.
Not true. I have advised clients on many occasions to continue to rent and look at buying when there situation improves.
First, you can rent with option to buy.





Second, the idea that renting is always more expensive than buying - it depends.





If you bought a house for $275,000, put 20% down, and have a $2000 monthly mortgage, at the end, you're probably paying $720,000 for a house that's worth $500,000 at the end of 30 years.





If you pay $1000 a month rent for 30 years, you've paid $360,000. If you put the other $1,000 into the stock market, and got an average return of 9% annually (which is less than the historic rate), you would also be sitting on a cool million, much more than what thehouse is worth.





The value is a combination of housing appreciation, what you pay in rent, what you pay in mortgage - so gotta check the facts.
Buy vs. Rent.





As housing market slump, it is easier to calculate ';Rent vs. Buy'; scenario. Because ';appreciation'; is no longer a factor.





Mortgage payment consists of two parts: interests and principal. Interests are like rent, which doesn't add to the equity to your house. It simply disappear as your pay it.





If interests portion of the mortgage payment is roughly equal to rent of equivalent property, then it is a decent buy.





For example, let's buy a $500,000 condo with 0% down and apply interests only loan (just like renting a place). Mortgage payment would be $3250/month. It is a bad buy, because you can enjoy same property for $2000/month.





Please note that I assume the tax benefits from home cancel out fees from home association and property tax. For more accurate calculation, consult with your CPA or accountant. But NOT your realtor, whom will say anything to get the deal to go through.





And again, if you like a particular property, then paying more may be reasonable. You are the only person who can decide how much more premium you are willing to pay.
RENT OR BUY CALCULATOR





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I am a mortgage loan officer. And I think that you need to give your RE agent a chance to see what they can do for you. As a loan officer I have access to working with 100's of banks who all provide different programs and some include 0$ down. So give it a shot as long as you have a bank account, a steady job, good credit, I think that there may be something that could be done for you, there are also programs for first time buyers you may want to look into that and the payment will not be too much more than what you pay now.
I don't see the question in your question.





Of course, realize that real estate agents get paid commissions on the purchase of homes...and only an infetessimal fraction of that amount on the rental of an apartment (and that only in the few isolated occasions where an agent deals in rental management). So they have a vested interest in converting renters to buyers. Same reason a Coke salesman won't sell you Pepsi.





Yes, it's always more economically advantageous over the long run to purchase than rent. But if you are unable to purchase, the entire comparison is academic.





Don't sweat it. There's nothing wrong with renting if you're happy, your family's happy and you're keeping your head above water.
Buy. Renting does not get you anywhere, unless you are moving elsewhere soon. Your real estate agent will find programs with zero down payment. The real estate market is down now and it is a great time to buy.
I agree. If you don't have it then don't do it. Why be in a financial burden just because someone tells you it's making someone else richer? I recommend buying ahouse when you're financially ready and you have all your ducks in a row. Good luck.
Yes, it is hard. But most states and the Federal Department of Housing have programs to allow people to buy with no or very little money down. You really have to do your research though so you don't get scammed.


Good luck and check out this:


http://www.hud.gov/buying/index.cfm