Housing Questions for Newlywed Young Couple

Riverside, California
Buying & Selling Real Estate
1yFollow

Housing Questions for Newlywed Young Couple

Dominik Geib
New to Real Estate · CA · Member since 2023 · 6 posts · 6 votes

My fiancée (21) and I (23) are getting married and planning to move in together by the end of the year. We’ve been exploring different housing options and have had a few questions come up that we’d love advice on.

A bit of context: Currently in college, so our income isn’t very consistent right now. However, we’re both highly motivated and have some savings to get started. With that in mind:

  • 1. Is a rent-to-own option a smart idea for our situation?
  • 2. Can we still qualify for an FHA loan if we go with a rent-to-own agreement?
  • 3. Would it be better to look into renting an ADU (Accessory Dwelling Unit) or a traditional apartment?
  • 4. Is it smarter to sign a standard 12-month lease, or should we try to find something more affordable, like an ADU, to save up over time?
  • 5. What housing options are the most flexible if our income or plans change unexpectedly?
  • 6. Is it better to live on our own right away, or would living with roommates or family temporarily help us save more?

Looking in Norco/Corona/Riverside/Moreno Valley/Jurupa Valley areas. These are just some of the questions we thought of. Any experience, guidance, help, input, or tips would be greatly appreciated. We want to be intentional with our decisions, and the last time I had a post, I got some great tips. Thank you in advance for taking your time to read this and for any tips you might have or experience that you'd share. 

1Reply
40 views

Most Popular Reply

Scott Mac
Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
1y

(#6) Live with parents and save 100% of what you can.

If you have not already, Read Rich Dad Poor Dad.

Good Luck!

1Reply
See this reply in the discussion

5 Replies

Jump to latestLatest
  • Matthew Irish-JonesBusiness Member
    Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
    1y

    @Dominik Geib congratulations on getting engaged.  I understand you are both in college.  Do either of you work full time as well?

    Irish Jones Realty4.947 Reviews
    View Page
    0Reply
  • Scott Mac
    Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    1y

    (#6) Live with parents and save 100% of what you can.

    If you have not already, Read Rich Dad Poor Dad.

    Good Luck!

    1Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    1y

    my market is San Diego.   It is not far from riverside but our price point is more extreme.  in extreme price markets, young people need every hack they can get to afford to purchase a property.

    A few years ago a conventional 95% OO loan option was added. Unless you absolutely have no way to cover the 1.5% LTV gap, I suggest you use the 95% LTV OO over the 96.5% LTV FHA. This is especially true if buying more than 2 units or purchasing units that need some TLC. Understand the fha PMI versus tradition pmi rules.

    Rent to own works great when property values are increasing.  It locks in a value.  We are current in a lull in appreciation in So Cal.  No idea when the lull will end.   If prices are not increasing, rent to own benefits the seller.

    Typically if you go rent to own, you will have lower than 96.5% LTV. I believe it is unlikely FHA will be your best financing option. Maybe the seller will offer financing.

    I recommend young people reduce rent to save for a home purchase.  Living with family is likely the best choice if it is an option.   Sometimes it is difficult to live with family and is time to fly the coop.  The lowest rent point besides staying with family is typically achieved by roommate quantity.   A 4 br unit typically has much cheaper rent than two 2 br units.   Of course you have to share the common areas with more people.

    Many LL charge a premium for leases significantly less than a year.  Saving takes time.   I suggest you do not pay a premium rent for a more flexible lease duration.

    You did not ask about income.  It is important to optimize income.  It is necessary to qualify for any loan    OT (not taxed for the next few years), side hustles (tips not taxed for the next few years), maximizing raises by committing to your best performance, etc.  you sacrafice when young to improve your life forever.

    You mentioned FHA. It has some short-comings. However, financing is important. I already discussed conventional 95% LTV. There are other options. Look into NACA. I cannot emphasize this enough for your situation. Other options are assumable and owner financing. The most common require OO. FHA and VA ( VA can be assumed by a non military OO). All options require an income that shows you can safely make the payments. It is why maximizing income is important.

    Good luck

    0Reply
  • Hamp Lee IIIPro Member
    Real Estate Agent · San Antonio, TX · Member since 2019 · 1k+ posts · 832 votes
    1y

    Check out the NACA loan program.

    Neighborhood Assistance Corporation of America (NACA) was formed in 1988 and provides an affordable option for potential first-time buyers:

    ✅ No down payment

    ✅ No closing costs or fees

    ✅ No mortgage insurance

    ✅ No consideration of credit score

    ✅ Below market fixed interest rate

    There are several requirements to be eligible, starting with attending one of their workshops.

    https://www.naca.com

    0Reply
  • Dominik Geib
    OP
    New to Real Estate · CA · Member since 2023 · 6 posts · 6 votes
    1y

    Thank you very much for all the helpful information and tips! Much appreacited!

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free