Dear Dave,

I’m single, have no kids, and I’ve paid off all my debt. I’m ready to move to Baby Step 3, and increase my emergency fund to cover three to six months of expenses. Now that I’m gaining control of my finances, the idea of leaving apartment life and owning a home is more appealing. Should I consider a rent-to-own deal on a house when the time comes?

Alex

Dear Alex,

I wouldn’t go that route. In rent-to-own scenarios, you pay more in rent so that some of it will go toward the down payment if you buy the home. However, in most rent-to-own deals, the renter ends up not buying the home. The net result? You paid more in rent, and you still don’t own a home!

In your situation, being a single guy with no kids, you’re better off to continue renting a while longer and save money like crazy. That way, you can look around, find something you really like, and make a big down payment. And make sure you get a 15-year, fixed-rate mortgage, where the monthly payments are no more than 25 percent of your take home pay.

Good luck, Alex! 

—Dave

Dear Dave,

I’m single, have no kids, and I’ve paid off all my debt. I’m ready to move to Baby Step 3, and increase my emergency fund to cover three to six months of expenses. Now that I’m gaining control of my finances, the idea of leaving apartment life and owning a home is more appealing. Should I consider a rent-to-own deal on a house when the time comes?

Alex

Dear Alex,

I wouldn’t go that route. In rent-to-own scenarios, you pay more in rent so that some of it will go toward the down payment if you buy the home. However, in most rent-to-own deals, the renter ends up not buying the home. The net result? You paid more in rent, and you still don’t own a home!

In your situation, being a single guy with no kids, you’re better off to continue renting a while longer and save money like crazy. That way, you can look around, find something you really like, and make a big down payment. And make sure you get a 15-year, fixed-rate mortgage, where the monthly payments are no more than 25 percent of your take home pay.

Good luck, Alex! 

—Dave