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Is buying smarter than renting?

Is buying smarter than renting? Topic: Process control and problem solving
June 19, 2019 / By Milicent
Question: I am getting out of the Army and looking to buy a house. The one that I am working with my realtor for is currently a short sale, selling for $90,000. If I can get a low interest rate VA loan, would buying this house be smarter than renting one in the same area for double, if not more the cost. Estimate mortgage payment is around 350, rent would be 850 or more. What are the risks of a short sale? If I can make the payments, is there any other problem that could arise with it being a short sale? The military pays me $1,266.16 per month for housing.
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Best Answers: Is buying smarter than renting?

Liberty Liberty | 2 days ago
The only problem with a short sale is the buying part. It is extremely frustrating. The seller's mortgage company does not own it- and so they are not a party to the contract. But they fully control the whole process. The seller has no money for any condition issues that need to be solved- the seller's mortgage company will refuse to repair anything. The mortgage company can back out at the very last moment or they can delay at the last moment and no one can do anything about it. So you won't know if you have a house or not until you do. ******************** But your main question was "is buying smarter than renting when the house payments are much less than rent." That would be true in most cases if you will own the house for at least five years. So- yes- I think that would be true for you.
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Liberty Originally Answered: I didn't charge a dollar amt for renting room to college student, is it still considered "renting"?
Write a letter stating exactly what you told us. If that ever happens to you again they will have to put their name on something (everyone has to pay their way), maybe their cellphone or checking account. Does a charge card have her address on it? The reason I think your letter of explanation would suffice as it would also be considered a reference letter. And, the IRS charges taxes when a person barters. So barter like you did is acceptable. Here to show state residency only 6 months is required (to get the cheaper rate).
Liberty Originally Answered: I didn't charge a dollar amt for renting room to college student, is it still considered "renting"?
No it is not considered "renting" when your family friend did not pay rent. She may or may not be able to establish in-state residency, depending on her college rules. You should understand that it is not your fault if she does not qualify for the in-state tuition rate. You were trying to help her by letting her live with you. It would be wrong to make up a fake rental or lease contract. Your friend needs to try and prove her case to the college she chose to attend. You must establish your in-state residency, usually over a period of time, from 6 months to 1 year or more, depending on the institution. Show intent of on-going residency in the state to which you are applying. Since public education is paid for by state taxes, it helps to show that you plan on living in that state on a long-term basis. Gather together all necessary documents to make your case. College officials who review applications for in-state residency requirements will want to see absolute proof of your status. These include bills addressed to you, apartment leases or mortgage applications, and proof of payment of local and state taxes. Prove your financial independence, if you are a self-supporting student. Again, gather together any documents that can help you establish this beyond any doubt. These include pay stubs or other verification of income generation. Do not try to take advantage of a status of in-state residency in two states at the same time. Once found out, one of those privileges will certainly be revoked. Check the websites or available documentation from the college you wish to attend, as they should have specific requirements for you to follow in order to establish in-state residency, or call the admissions office directly.
Liberty Originally Answered: I didn't charge a dollar amt for renting room to college student, is it still considered "renting"?
All of this is meaningless. This friend cannot establish residency this way for tuition purposes. She moved in with you solely to get instate tuition and that's not enough to meet residency. She didn't get a job and support herself. She moved in with you and crossed her fingers. Going back and claiming you charged her rent is fraud. You didn't charge her rent and you certainly didn't claim it on your tax return. Edit: She isn't establishing residency with a part time job. She isn't establishing residency by staying with you--you just gave a her break on room and board. Yes, out of state tuition is tough, but you don't get instate tuition this way. If you could everybody would pay it. From FAFSA and the IRS's perspective she is still her parent's dependent and since they didn't move, neither did she. She is simply temporarily away from home. She certainly didn't demonstrate through a part time job that she was independently supporting herself. No, she was attending school and it's obvious that she's not a resident. http://professionals.collegeboard.com/testing/international/state

July July
This is a personal decision each would have to make on their own. I personally prefer to own as oppose to renting. #1 You are able to make decisions as to painting and the color #2 You acquire equity over a period of time #3 As long as you pay the mortgage you have a place to stay. A landlord, without reason, could require that you move even if you have a habit of paying your rent on time. #4 There are a few tax advantages #5 You may sell the property if you so desire. #6 You may refinance the property if you are in need of cash for any reason, with the proper equity. You might have a few problems with the short sale. Most short sales are sold as is without warranty. In other words if there are repairs necessary as stated on a VA appraisal, the lender or seller would not be willing to make these repairs. VA would require these repairs to be made prior to you moving into the property, with out any waiver of any type. Normally the veteran is not allowed to make these repairs. Also under a VA no cost to the veteran the seller or bank might not be willing to pay the closing cost required of this no cost to the veteran called a VA (NO NO) If you are getting out of the army you would no longer have a job nor the housing allowance. Lenders would require a 2 year provable income in the same career field. Your ability to make the monthly payments would not be based on your housing allowance. You would have a ratio based on your income per month and the debts on your credit report you are required to pay each month. This ratio should be in the range of 33% to around 37%. The first thing you would want to do is to find a local lender that does VA mortgage loan. This local loan officer would pre-approve you for a mortgage loan. This pre-approval would indicate the amount of house you are able to purchase. This mortgage loan officer would also find out your ratio. Once you have been pre-approved to purchase a house you would then be able to buy a house with your real estate agent. Your real estate agent should be informing you of the pre-approval process and the requirements necessary to be pre-approved. From a combat veteran to another veteran, thanks for serving. I hope this has been of some benefit to you, good luck. "FIGHT ON"
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July Originally Answered: First time renting an apt, HELP?
Before you get ready to sign any leases, you need to understand what you are getting into. Leases are serious legal documents that are not written and signed for giggles. They are financial agreements to pay rent for a specific amount of time regardless of what happens in your life. For example if you lose your job and are unable to afford to pay rent, you will still owe rent through your lease term. Or if for some reason you choose to leave the apartment to live elsewhere, you still owe rent through the lease term even though you aren't using the property. Most first time renters just don't understand this and as a result get formally evicted and ruin their chances of getting any landlord to rent to the for years into the future. Since you are not working, it is in your best interest to not sign the lease. This gives you the freedom to move if you all break up. Your boyfriend will have to fill out an application to allow the landlord to do a credit and background check to make sure he is not a known drug dealer/child molester and can afford the rent. Because it is his first apartment and his limited work history, he will likely need a parent to co-sign the lease so any applications should be filled out by his cosigner too. Take your time inspecting each property. Try to look at places at times when your prospective neighbors will be at home to see what they are like and be able to gauge the noise level between apartments. Talk to your prospective neighbors to find out if the landlord maintains the property well and is responsive to the needs of the tenants or is a scumbag slumlord. Do not let the landlord/leasing agent promise you anything that isn't made part of the written lease. Utilities are always billed outside of the lease unless specified in the lease. This will require your boyfriend to open an account at each one immediately upon move in. Failure will put him in breach of contract allowing the landlord to evict if they choose. Sometimes the utilities will require a deposit for service so be prepared for it. Utilities are paid based upon usage so you will be billed at the end of the month. All of your questions should be answered by the lease itself. Again, don't let the landlord promise you anything that is not specified in the lease. Lastly you need to make sure you have a good cushion before you begin living in the real world. Make sure you have a good 2 months worth of monthly expenses in savings to cover emergency situations like getting sick or injured disallowing your ability to go to work and being able to cover your bills. Also make sure that you are always saving and not living paycheck to paycheck. Good Luck, the real world is expensive.
July Originally Answered: First time renting an apt, HELP?
For the places you are interested in, ask for a copy of the lease agreement. It will be very tedious but you need to read through the whole document. In particular, make sure they haven't sneaked in any unreasonable terms (one lease I saw made me responsible for rebuilding the apartment if it was destroyed by natural causes). Utilities are generally not included. If they are, then the landlord has built in a large amount into the rent to cover them. The deposits for phone, water, power, gas, and cable can be substantial and setting all this up the first time will probably take a full weekday to do this. Also, most electric companies will give you the average bill for that address for the past 12 months. That is a good way to avoid a place that is not well-insulated and could cost a fortune in the winter/summer. Be very conservative in estimating what you can pay for an apartment. There are a lot of expenses in getting set that one tends to forget (do you have hand tools, toilet plunger, corkscrew, mop, broom, trash bins, etc). This can add up to a lot. Go to a dollar store first. Replace those things with better stuff when you can. Garage sales are your friend also. Craigslist has a surprising amount of free furniture. Be prepared to pay the first and last month's rent plus a damage deposit. Also, be a good renter. Let the landlord know if there are leaks in the plumbing and don't damage the walls. You will need a reference from this landlord when you decide to upgrade. Good luck, and don't feel bad asking for help.

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