What exactly is Rent-to-Own?
The phrase Rent-to-Own means a lease combined with an option to purchase the condo, within a specified time period, for an agreed-upon price.
Why Would Someone Be Interested in Rent-to-Own?
Because it provides a path to home ownership when available funds for a conventional down payment are not sufficient, and/or time is needed to repair your credit rating.
How Long is the Rent-to-Own Period?
It’s flexible and negotiable between you and the condo owner. Depending on your personal readiness and how much down payment needs to build up, the Rent-to-Own period could last a handful of months to 12-18 months.
Usually, a shorter period of time is preferred by the condo owner. He or she typically wants to sell the condo as quickly as possible. A shorter period of time can also be beneficial to the purchaser too, because the sooner you get out of a rental situation and into ownership, the better. However, most purchasers enter into Rent-to-Own because they need time to build up the down payment and repair their credit, and condo sellers understand this.
Where Are These Condos?
All over Chicago and the suburbs. There are even downtown Chicago condos that are available rent-to-own!
Rent-to-Own agreements typically require a 1%- 5% down payment or “option fee” to the seller, which is much less than what would be required for a traditional down payment in conventional financing. That fee is generally non-refundable but it is applied toward the purchase of the condo at the end of the Rent-to-Own agreement.
Other than this small down payment, all that is required monetarily is a security deposit similar to most other rental situations.
A credit check is commonly run as part of the application process. It is up to the condo seller to accept or deny individual applicants.
What If I Have Challenged Credit?
Challenged credit is one of the reasons people participate in the Rent-to-Own program. Condo sellers who accept Rent-to-Own applicants understand this.
Challenged or damaged credit is probably the situation most of us are in today. It can include:
• Delinquent accounts
• Late pays
• Medical bills
• Not enough credit history
Recently, lenders have tightened the criteria to obtain a loan, making it more difficult to finance a condo. Key to understanding if Rent-to-Own might be workable in your situation is an honest evaluation of your credit rating. If you have the type of challenged credit that might currently be keeping your from qualifying for a loan, but that can be repaired within about a year’s time with hard work and resources we can provide, Rent-to-Own will probably be a good match. More serious credit challenges can also be eventually overcome but might require a longer period of repair and healing before Rent-to-Own would work. We have resources for those situations, too.
What About Bankruptcy?
Individual situations always vary, but generally speaking, we can work with people in Chapter 13 if they are currently in their payment period or beyond. People who have had a Chapter 7 bankruptcy must wait two years after discharge.
What If I Do Not Have Problems With My Credit?
Many people choose Rent-to-Own not because of challenged credit, but because they lack a downpayment. You might have good credit without even knowing it!
• “Good” does not have to mean perfect
• A score of 620 gets you started with most lenders
• Might help you buy immediately or greatly shorten the Rent-to-Own time period
• Mortgage interest rates remain very low at this time
You may be able to buy and bypass the Rent-to-Own program without even knowing it!
How Much of the Rent Goes Toward the Down payment?
In order to comply with the law, the portion of the monthly payment that goes toward the down payment must be a dollar amount above the market rent for the area. So, as an example, if the market rent for a particular type of condo is $800 per month, the total monthly payment you’d make might be $1,000, with $200 going toward building up your down payment. That extra amount per month is called a “rent credit” and is credited toward the final payment due at the end of the lease.
So I’m Renting a Condo, Building Up a Down payment and Repairing My Credit. Then What Happens?
Your Rent-to-Own specialist at OwnACondo.com will always be available to help and check on your progress. The goal is to finish the lease period with a sufficient down payment built up and a credit record that makes you eligible for a loan to complete the purchase.
Where Do I Get That Loan?
Lending resources are plentiful, from nationally advertised mortgage companies to the bank in your neighborhood. We’re happy to make a referral to help you with condo financing. We’re currently working with Bank of America, one of the nation’s leading financial institutions, and the largest bank holding company in the country, by assets. Click the link in this paragraph to learn more about Bank of America and you’ll also see a handy form you can fill out to get started with an inquiry.
Who Pays the Taxes and the Condo Association Fees While I’m Renting to Own?
Typically, the seller.
Who Pays for Condo Repair and Maintenance?
This is usually negotiated between you and the seller.
Check out these resources:
• FREE consultation with a lending professional to see if you qualify for financing
• Credit repair program available
• Best selection of rent-to-own condos
Specialists on Your Side
We’re with you every step of the way through the process. You’ve got the knowledge and power of OwnACondo.com and its team of rent-to-own specialists. It only makes sense to deal with specialists. We know condos!
We’re proud to be partnered with Bank of America, the nation’s largest bank holding company, by assets. As a preferred partner, we’ve got direct access to Bank of America’s number one mortgage loan officer and his team of specialists. They’re available to answer questions and help you get a mortgage.
$8,000 Tax Credit for First-Time Homebuyers, Condos Included!
There’s another great resource we can help you with if you’re a first-time home buyer. It’s the $8000 Tax Credit that’s part of the government’s economic stimulus program. Already, however, time is getting short, so be sure to click that link in this paragraph for more information.
Why You’ll Love Rent-To-Own
Check Out These Benefits
IN YOUR POCKET
No need for a large downpayment to start
Pick a favorite community
You’re a homeowner!
Challenged credit OK
Enjoy condo life right away
Cleaned-up credit gives you a fresh start
Downpayment accumulates month by month
Work on your credit standing
You have more control than an apartment situation
Time span can be flexible, depending on your readiness
Use free resources to make you a better homeowner and financial consumer
A condo is real property, an asset for you to use to your advantage
What if I Change My Mind?
At the end of the Rent-to-Own period, you are not obligated to purchase the condo. Keep in mind however, that your initial 1%-5% down payment and the monthly rent credit probably will be forfeited. The goal of the condo seller is not to provide housing for people who might, but might not, be interested in purchasing. The goal of the condo seller is to sell his or her condo. Your goal as a participant in the process should be equally serious—to own. The Rent-to-Own option has been made available to help out all parties. A particular condominium does not have to be your home for the rest of your life, but it should be seen as far more than an apartment to “try on” for a period of time before moving on. Your OwnACondo.com Rent-to-Own specialist will help you find the right place based on the community, price, size and amenities you’re looking for.
What If I Need a House?
Our Rent-to-Own specialists are licensed Realtors® and can also help you find a rent-to-own house that meets your needs, depending upon availability in any particular location and your qualifications.
Let’s Get Started!
Here’s all you have to do to begin:
1. Give us a call and let us know you’re interested.
2. Tell us the specific or general area where you’d like to live.
3. Answer a few basic questions about your employment, credit situation and the amount you can afford to pay. There are no wrong answers! Programs exist for many individual situations.
4. Let us get to work for you. Depending upon your situation, we may put you in touch with our preferred lender or make a recommendation for a credit repair and credit counseling program.
All these services are FREE to you!
Restrictions may apply, of course, so call OwnACondo.com today to learn more about this great opportunity.