Yesterday I wrote about how some of our tenants would really like to buy the houses they are living in. Sure, there are lots of people who, in the current economy, prefer to rent, but there are others who would rather put their money into property, because as you know, they aren’t making any more land!
Wanting to buy a home and actually being able to do so are two very different things. Unlike the people you see on House Hunters, who always seem to have money for million-dollar homes in their late twenties, a lot of people have barriers to coming up with the all-important down payment, or they have such bad credit that lenders will not let them buy other than with cash. Too often, both of these situations are caused by people having the misfortune of becoming injured or ill, which in this country means anyone not mega-rich or lucky enough to be able to afford good insurance will owe lots and lots of money.
Here are a couple of examples of people we are currently working with (details are vague to protect their privacy).
Small Business Owner Gets Hurt
One of our tenants was a small-business owner when they first leased one of our houses. Small business owners often have trouble buying a house, because they don’t have the proof of a steady income that’s needed. Then, our tenant became badly hurt in an accident while engaged in a sport they loved. Of course, this prevented them from being able to work for a while, and of course, large hospital and doctor bills piled up (it’s also really hard for small business owners to afford insurance; that’s why I have a job in Corporate America that will insure me and Lee).
This tenant had always intended to buy this home from us. But, who will lend them the money? No one, so far. So, they keep paying us for the house they’d like to own and renovate for themselves.
Starting Over from Scratch after an Accident
Another long-term tenant has every intention of buying the house where their family lives from us. This tenant has a number of barriers, including huge hospital bills from a car accident, plus bills for a serious chronic condition that had to be treated or they couldn’t work. Just having a job doesn’t mean they can buy the house, though. If you’ve had a divorce, a job loss, or credit card debt, you have to fix all these things to raise your credit score. Sometimes you can work with creditors to raise it, but it takes time and a lot of persistence.
The people that manage to get this done are to be commended, because, in my opinion, if you have the tenacity and skill to work on this, you have a good chance of improving in other areas and eventually reaching the goal of home ownership. And if they are also dealing with illness or injuries in their families at the same time, whew, that’s some work.
Yes, the best advice is to not get sick, so you can buy a house (or keep your current house). But, that’s not always possible, is it?
Here’s Some Help
Lee wrote up some ways we can help you with your credit score, and Mandi wrote a nice blog about her efforts to improve hers. We also have written some posts in the past about how to get yourself in shape to buy a house. I hope this gives any of you in this situation some ideas, and any of you who are working with a potential buyer with a credit issue some resources, as well.
- A Word About Credit Scores – by Lee Bruns
- How We Can Help with Your Credit Score – by Lee Bruns
- What Makes Up Your Credit Score? – by Lee Bruns
- First -time Home Buyers, and Rebuilding Bad Credit – by Mandi Shuffield
- To Rent Your House, or Not? Part 1 – by Mandi Shuffield
- To Rent Your House, or Not? Part 2 – by Mandi Shuffield
- How To Buy Your First House – by Lee Bruns