I received a call from a buyer interested in a property advertised on craigslist. Currently owned by an investment company, they were offering a rent-to-own and seller financing options. This buyer was interested in buying a home after foreclosure.
The buyer, like so many, had gone through tough times. Upon questioning, he had nothing to put down on a new home, and only had a small retirement account with no liquid savings.
Despite the fact that he really wanted to an opportunity to buy again, my best advice was not to buy right now. I believe strongly that home ownership enhances the quality of one’s life. It is also however, expensive, particularly here in San Diego.
Buying any home, particularly a house, means having the financial means to handle repairs, maintenance, and anything else that comes up. Roofs can leak, drains can clog, water heaters die, the possible repair list is endless. With no available savings, and damaged credit, how does one handle these things?
If you are in a recovery mode financially, I encourage you to forget about owning a home for a couple of years. Focus on cutting your living costs, rebuilding your credit, and saving money. At the least, give yourself a year or two, then re-evaluate.
There are eager lenders everywhere who will try to get you a mortgage despite your financial challenges. Even if you can get a mortgage, it will typically have higher interest rates and make saving money impossible. Collectively, millions of people have come through hard times. If you are one of these folks who is thinking of buying a home after foreclosure, take your time before jumping back into buying a home.