Rent a house with bad credit

Rent a house with bad credit

If you need to know how to rent a house with bad credit, it’s possible. You have an uphill climb, but renting a home with bad credit isn’t a completely hopeless cause. Here are some tips from a landlord.

How do I know it’s an uphill climb? Other landlords ask me if I’d rent to someone with bad credit. But what I’d tell you is probably more valuable to you than what I tell them.

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What salary do I need to buy a house?

What salary do I need to buy a house?

What salary do I need to buy a house? I struggled with that question in my 20s and it probably kept me renting a year or so longer than I really needed to be. Then again, considering the housing crisis of 2007-2008, renting a year or so longer was a small price to pay to avoid potentially making the biggest financial mistake of my life.

One of the reasons for that financial crisis was not enough people asking that question. A second reason was banks being dishonest about the answer. For the record, I think buying a house is a good idea and it’s worth it. But you have to be sane about it to keep from getting into trouble.

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Commodore financial history, 1978-1994

Commodore financial history, 1978-1994

Commodore’s rise and fall are legendary, at least to people like me who grew up using their computers. Putting numbers to that rise and fall was more difficult. I dug up the Commodore financial history from 1978-1994 to help quantify that spectacular rise and fall. Read more

Pay off investment property

Paying off debt involves some nasty math, and when you go to pay off investment property, it’s no exception. That’s why it’s so controversial. When I was in college, my university used this kind of math to weed students out, so it should come as no surprise that the lending industry booms, and so many hucksters make a fortune hawking questionable ways to get out of debt.

I have a better way, and you won’t pay me anything for the advice. Read on.

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Can you afford that house or apartment?

Declining incomes have more people paying a higher percentage of their income in rent than in the past. I blame the recession. And what caused the recession? People getting in over their heads, buying more house than they can afford. I blame the big banks for that, because I personally experienced it. If I’d bought the kind of house loan officers were telling me to buy in 2002, I’d have been foreclosed on, too.

Here’s a very easy way to figure out whether you can afford a particular place. Read more

Twice-monthly mortgage payment alternatives

The debate whether making a twice-monthly mortgage payment saves money is making the rounds on some popular blogs right now. The idea is paying your mortgage every two weeks rather than every month in order to save money. Whether this trick works depends on several things, but the most important part is that you shouldn’t pay a penny extra for this service. You should also consider twice-monthly mortgage payment alternatives.

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I didn’t cause the depression

Various analysts are blaming the current depression on people like me. The reasoning goes like this: I have money in the bank, therefore, I should be out spending it, for the greater good, to stir the economy.

Let’s correct that right now.People like me “hoarding” cash didn’t cause this depression. I played by the rules. I didn’t lie on my mortgage application. I bought less house than the bank said I could afford, because I didn’t see how I could make that payment and still buy groceries. I bought a Honda Civic because I didn’t see how I could afford a car that cost $25,000 or $30,000 and I really didn’t see how I could afford to put gas in it. I made this decision when gas cost $1.59 a gallon in Missouri.

Basically, I made a budget and then I made the decision to stick with it. It wasn’t rocket science. Any time I thought about buying something, I sat down with a spreadsheet, entered in all the money I paid out each month, entered what I made, and figured out if the money left over was enough to buy whatever it was I wanted.

We were due for a depression, or at least a recession, at the beginning of the century. The dot-com boom and Y2K was a bonanza, but then two things happened. Y2K came and went, the world didn’t end, and people quit buying survival supplies in large quantities. Meanwhile, these startups failed to come up with viable business plans, continued to spend money faster than the government, and ended up going out of business. This hurt those companies, but it also hurt companies like Cisco and IBM and Intel, because as these companies went bust, their inventory of technology equipment, some of it unused, went on the market at bargain prices. There was no reason to buy a new Cisco router from CDW when you could buy the same thing, still sealed in the package, from a liquidator for half the price.

Then 9/11 happened and it really looked like we’d get our recession. But the government slashed interest rates, changed bank regulations, and encouraged people to buy like there was no tomorrow. GM started offering 0% financing on its cars in order to move them. Soon you could get free financing on anything but a house, and interest rates on houses were ridiculously low. And anyone could get a loan. Republicans loved it because it made the economy go boom-boom again. Democrats loved it because people at any income level could get mortgages.

But the problem was that many of these loans had onerous terms and conditions, and just because you could afford the payments one day didn’t mean you’d be able to afford them in two, three, or five years after some of the back-loaded terms kicked in. Of course, nobody worried about that because they were living the high life.

And then it all fell apart. It wasn’t quite as rapid as it seems. I think people started having problems paying their bills in 2005 or so, but it didn’t quite hit critical mass yet. It hit the smaller banks first. I know because the banks who had my mortgage kept going under, and every year or so, a slightly bigger bank would end up with my mortgage. But those weren’t any match for this monster either. Countrywide got my loan in 2007, but Countrywide wasn’t a dinky little bank. It went under, and when I made my final house payment, that payment went to Bank of America. Now it looks like even the mighty Bank of America might make me look like the kiss of death.

But that wasn’t the only problem. These bad loans got packaged up and re-sold. And somehow, these bad loans got higher grades than they deserved. A guy working as a slicer at Arby’s making $9/hour living in a $150,000 house isn’t a good investment. When everything’s going right, he can afford to make his payments, but the minute something goes wrong, he’s going to start missing payments and might not ever recover. So unless the guy gets a decent job, he’s not going to be able to afford to stay in that house. Yet somehow, a bank could package a bunch of loans like this and spin it as a grade-A investment.

Imagine me going around to my neighbors’ houses on trash day, filling boxes with trash, and selling the boxes, legally able to tell the buyer that the box contains something valuable. That’s great, until someone opens the box and realizes it’s just a box of trash.

No, this depression wasn’t caused by people like me. It was caused by people living beyond their means for too long, and not being able to pay the piper when the time came.

There’s another word for what’s happening right now, besides recession or depression. That word is “correction.” When the economy has been going in one direction for too long, it corrects itself. Sometime in the future, there will be another correction, and the economy will start improving again.

But I read my ultimate proof yesterday. Supposedly, if people like me would just spend their money, things would get better. So why does someone walk into a Jeep dealership with $24,000 in cash, intent on driving home in a new Jeep, and end up driving himself and his still-heavy wallet home in his old car?

And let’s look at people like me one other way. When I nearly lost my job in January, I had almost six months’ worth of income in the bank and a plan in place to be able to live off it for a couple of years, potentially. It wouldn’t have been a comfortable living, but it would have been doable. There would have been no need for me to go collect unemployment. I would not have been a burden on society. And when I retire, I’ll retire with enough money to get me through the rest of my life, with or without Social Security. I won’t be a burden on society either.

People who save their money might not spend it at the most opportune time for everyone else, so they might fail to even the economy out like a capacitor evens out electrical power. But they are never, ever a drag on society.

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