Your Budget and Rent to Own

Buying a home is likely to be the most expensive purchase you will ever make. And if you’ve waited so long for that day to come, you’ve undoubtedly thought about the features you’d like—maybe you’d like a massive master bedroom with a walk-in walk-in, or maybe a gourmet kitchen with granite counters?

While you don’t want to skimp on the amenities you love, adding too many can add to the cost and wipe out your budget. Instead of thinking right now, start thinking about your long-term financial goals and assessing your budget before buying, you can get the home you want without feeling buyer’s regret. The only thing to remember is that you can add all the things you love to your home and reap the benefits when the price goes up for more.

When you are pre-approved to own a lease, we will determine how much we think you can afford on a home without being in a situation where you have to do multiple jobs just to make your payments. As in many cases, we’ll give an upper budget limit, but don’t assume that the final figure provided is how much you should spend. The top of the budget is based on the assumption that you will pay or pay off a lot of your debt and that your current job situation will remain the same, if not improve.

1. Confirm your budget online
Want to know what you can afford on your own? Go online and use a mortgage calculator – After you enter the sale price, insurance term, and interest rate, the calculator estimates your monthly payment, including homeowners insurance, property taxes, and private mortgage insurance. This can give you a good estimate of how much you can pay based on the sale price, but don’t stop there. See if there are other expenses that you will need to work into your budget after buying a home.

For example, will you have to pay your monthly homeowners association dues? Will you need to hire a lawn or pest service? Is your facility likely to increase after you move? These costs can add up and eat into your monthly budget, and if you are not willing to sacrifice your current lifestyle for a new home, it is wise to choose a less expensive home. It will result in lower monthly payments. I suggest creating a priority list of “essential people” that you would like to have in the house. List the 5 to 10 most important things in order of priority that you cannot do without down to those items that would be nice to have, but not necessary. By doing this, you will be able to focus on the type of home you want faster and you will be in a better position to stay within your budget when you start looking for homes.

2. Keep tabs on your real estate agent
I’ve only had positive experiences with the real estate agents we’ve worked with, but not everyone has been so lucky. When working with a real estate agent, we determine the budget for you and the realtor. It is important that the realtor commits himself to staying within the established budget. Good clients respect your money and only show you homes you can afford.

However, some agents may try to push the envelope and recommend properties outside your price point. We’ll be a check and balance and not let that happen but you also have to be firm and stick to your weapons.

3. Avoid being like the neighbors
It is very easy to fall into the cycle of “compare and despair”. If you’re working on a $250,000 budget and your best friend just bought a home for $300,000, you may find yourself comparing your home options and amenities to him or her.

This is a bad cycle to fall into, especially when it comes to buying a home. A house is not an expensive pair of shoes or an expensive handbag – if you overspend when buying a house, it is not easy to recover from a mistake.

Instead of obsessing over the fact that your friend bought a home with an outside kitchen, offer your congratulations, then get excited about what your $250,000 budget can do for you. Maybe you’ll have four bedrooms instead of two, or you’ll have a gas oven instead of an electric one. Next, think about ways you’d benefit from staying within your budget, such as maintaining a health leave or retirement fund, or starting a college education fund for your children.

4. Avoid bidding wars
Imagine this scenario: you find the perfect home, you make a solid offer…then a realtor calls to let you know that the seller has multiple offers to choose from. Competing with other buyers is no cakewalk, and to win the bidding war you often have to increase your bid. That’s not necessarily bad, as long as you can stay within budget – however, bidding wars can quickly get out of hand. As a general rule, we wouldn’t usually get into a bidding war especially if it would artificially inflate the price of a home above the actual market value. why? In rent to own, there is an estimate added to the price of the home for each year you are in the program. This estimate is usually built on top of the market value or list price. If this is artificially higher than it should be, it could cause problems for you when you qualify for a mortgage on that home at the end of the lease term to own it. The assessed value from the lender may not be present due to the inflated rate set during the bidding war.

5. Bidding on unsold homes
Some buyers shy away from homes that have been on the market for a long time, assuming there must be a hidden flaw. But sometimes, not being able to sell a home is simpler. For example, maybe it has poor attractiveness, or there is too much stock in a particular market.

Therefore, it is important that you do not dismiss a spontaneous house just because it has been sitting out for so long. If anything, look for these homes. Perhaps the seller is excited and willing to drop the asking price to move the property. This is especially good news if you fall in love with a home that is slightly above your budget as you may be able to negotiate a lower purchase price and it can fall within your budget.

Even if the seller is not willing to drop the price, there are still more opportunities to negotiate when the home has been on the market for several months. For example, you may be able to call an emergency to replace an old carpet or paint the exterior of the house. If you can determine why the property is not being sold, you can ask the seller to lower the asking price for the house or offer a cash allowance for the repair.

If you’re still concerned about potential hidden flaws, mention in your offer that the show is subject to a satisfactory home inspection – which is a good idea no matter what. If a home inspection reveals problems, such as problems with the plumbing, electrical system, ceilings, appliances, or windows, you can ask the buyer to make the necessary repairs, or you can take your offer off the table.


Staying within budget when buying a home requires discipline, so you should approach the buying process carefully. Know what you’re willing to spend, and refuse to look at homes that are on top of your budget. If you can’t find a suitable property after a few weeks or months, reconsider your budget to see if you have any wiggle room. If not, wait – it’s only a matter of time before the right home comes along.