Do you want to buy a house but you’re not quite ready to take out a loan? The good news is that you can still become a homeowner, moving into your house right away! In our latest post, you will learn how to buy a house without a mortgage in Chicago!
If you want to buy a house without a mortgage in Chicago, you’ll either have to come up with the cash up front or look into alternative ways of funding the property. When you work with a homeowner who will allow you to rent to own, there can be benefits for everyone involved. Keep reading to learn more about the benefits, how the process works, and what to watch out for when using a rent to own contract to buy a house without a mortgage in Chicago!
Benefits For Buyers
Buyers will receive a number of great benefits when using a rent to own agreement to buy a house in Chicago. A few of these benefits include…
Try Before You Buy
When you use a rent to own agreement to buy a house in market_city], you’ll be able to really get an idea of what owning the home will be like, before committing to the sale. Once your lease-term is up, you’ll be able to buy or walk away if you deem the property isn’t right for you. You’ll just have to watch for penalties or the loss of your option fee.
Time To Save
Not only will you need a downpayment when you buy a home, but there are a number of other expenses you will likely face as well. Repair costs, moving costs, closing costs, turning utilities on, acquiring furniture to fit the space, and all the other miscellaneous expenses you will face when buying a house in Chicago. Having some time to save up while still being able to lock in a great price for your dream home is a huge perk for potential homeowners.
Many wannabe homeowners don’t buy because their credit won’t let them qualify for a loan. During the lease period, the potential buyer will have the chance to repair their credit. You can take this one step further by having the owner report your on-time rent payments to the credit bureaus, thus helping to raise your credit score even higher.
The sale price is determined at the beginning of the agreement. You won’t have to worry about rising prices or market fluctuations. You will be able to buy the house for the price determined today. Who knows, in three years from now the value of the property could go through the roof, but you will still have the option to buy the house at the original, lower price.
Benefits For Sellers
There are several wonderful benefits for Chicago home sellers too. A few of these benefits include…
Most of the time, potential buyers won’t mind paying the asking price in exchange for being able to rent the house, prepare for a mortgage, and ultimately purchase the property outright at today’s prices. If a seller is able to wait to receive the proceeds from the sale, a rent to own contract can help ensure they get the price they want.
While the homeowner won’t collect on the property right away, they will be able to generate a monthly income from the property. Your potential buyer will pay you to rent each month until the end of the lease term. The last thing a buyer would want to do is default on the agreement. Knowing this, you can almost guarantee that you will receive your rent on time each and every month. Your property isn’t likely to be damaged as your tenant will have a strong interest in keeping the house nice. They may even request to do some upgrades to the property.
How It Works
Rent to own contracts can be set up very differently. Some of the general practices associated with a rent to own contract include:
- A higher than average rent paid each month with a percentage of it going toward the buyer’s down payment.
- An option fee paid to the seller upfront securing the deal and providing the buyer with the option to buy at the end of the lease term.
- Designation of who is responsible for what. Repairs, maintenance, insurance, taxes, and utility payments should all be addressed.
- Contingencies are often put in the contract to protect the buyer from purchasing a house with undisclosed damage or costs.
When a rent to own agreement is set up properly, both the buyer and seller will benefit from the deal. At Chicago Home Buyers, we can help facilitate deals between buyers and sellers, making sure every detail has been taken care of.