My Own Personal Housing Crisis

I have to admit, I have felt a bit immune to the housing crisis this past year because, well...I don't own my own home. I don't pay a mortgage, and in fact I don't even pay rent. No, I'm not living in a box. I live in a home owned by my father-in-law.

He purchased the home as his retirement home about a year ago. At the time, he didn't plan to retire for about two to three years. He let my wife and I live in the home until he was ready to retire, so we figured we had plenty of time to stick aside our cash and save for a down payment on our own home.

During the past year, we have been using our savings from not paying rent to pay down debt, and we also had some unexpected expenses which came up, mainly veterinarian bills for our three dogs and our cat. Yes, we are animal lovers and they are like members of our family. I know, I used to roll my eyes when people would say their pets are like their kids, but I love our pets and not taking care of their health when they are sick is just not an option for me. I also could not get rid of any of our animals. That would be like asking me to give away my wife or one of my children. Our oldest dog has been living with us for 14 years.

But, I digress. This past week we were informed that my father-in-law and his wife plan to move into their house in about two months. Originally, they had promised to give us six months notice when they planned to move. Whoops.

This puts us in a bind for sure. Not only do I have to find a new place to live in the next two months, but I will have to either start paying rent again, or a mortgage. I have never been a homeowner because my previous profession had my family moving once every two to three years. I have money in the bank, but certainly not enough to pay for a down payment on a house.

We now have a few options:

Rent: When it comes to real estate, this is actually the worst deal. You are putting money in your landlord's pocket, and you are not building up equity in your own real estate. Considering the state of today's real estate market, renting may not be so bad, but on the other hand there are good housing deals to be had. I can't rent an apartment because of the pets. One or two pets might fly with a landlord, but not four. This might also make renting a house difficult, too. Even if a landlord does allow pets, there is usually a pet deposit of about $200 per animal. I would have to pay $800, on top of a security deposit and first and last month's rent. Pricey.

Buy: I could buy a home, but this presents a few problems. I am still paying down debt (medical bills, mostly), and as a result my credit score is not the greatest (about 630, the last time I checked). I do still have a VA housing loan available to me due to my prior military service, so it might be possible to get a home with no down payment, but I believe I would still have to pay closing costs, which can still be several thousand dollars. I can save some money in the next two months, but that's a tall order on top of finding a home and moving.

Manufactured housing: Well, I do live in Oklahoma, and there are many manufactured housing communities (i.e. trailer parks) in the area. Manufactured housing has actually come a long way since my mom lived in a trailer park when I was 12 years old. However, trailer homes rarely appreciate in value (unless it's sitting on your own land, then the land goes up in value, not the home). When you resell, you usually take a loss, like selling a car. Also, you can't just put a manufactured house anywhere. It either has to go in a trailer park or on your own plot of land (if zoning laws allow it). I could probably purchase a manufactured house, put it in a community, and pay about $600 per month for the house and the lot rent combined. That also included water and sewerage hookups. Due to the amount of time I have to work with, I'm considering this as a short-term option, even if I just rent.

Rent-to-own: This is actually widely available where I live. You rent a house, but a portion of the rent goes to purchase the house. Typically, you either pay a down payment at the beginning of the lease period and then make rental payments, usually for a term of 6 months to 2 years, until you are able to secure financing to purchase the house. The downside: the down payment can be steep, and the rental payments don't reduce the purchase price of the house by much. It's very expensive.

Plan of action: First, I will have to order my credit report and score, to see where I stand. Next, I have to submit my VA loan paperwork, to prove I am eligible. Then it's a matter of talking to my bank or credit union to see if I am eligible to receive financing, considering the state of my credit report and credit score. Then, it's time to go house-hunting. At the same time, I'll explore the manufactured housing option. Honestly, that only works for me if I can purchase the land/home package. Even some trailer parks frown on pets, especially when one household has four of them.

No matter what, this is not the best scenario in which to buy a house. I have a deadline, a short amount of time to find and purchase a house, and don't know if I will even qualify for the loan due to my family's medical bills.