Financing in Chicago>Question Details

Yolanda Brad…, Renter in Chicago, IL

I'm am looking to rent to own, or buy. But I'm not sure I understand the process

Asked by Yolanda Bradley, Chicago, IL Sat Jul 19, 2014

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Rent to own is not a good idea, as you stand to lose a lot of money.

If you are having financial issues that are preventing you from buying a home in the normal manner, I strongly suggest you rent for now, while working on whatever it is that is keeping you from buying a home.

In most rent to own arrangements, you will be asked to give an upfront deposit and pay rent over and above the usual rent. The deposit and the extra rent are NON-REFUNDABLE. If you do not buy the home for any reason (like you can't be approved for a loan) you forfeit all that money.

Only the extra rent, along with the deposit, will be applied to the purchase - NOT all the rent (in case that's what you thought!).

The sale price will be decided now, at the beginning of the lease, not at the end - a year or 2 down the road.
This kind of arrangement favors the seller not the buyer!
There are very few, if any, homes from which to choose, as most sellers who want to sell, and can sell, sell now, not later.

Don't do it!
1 vote Thank Flag Link Thu Jul 31, 2014
I would exhaust your options to purchase first. Most lenders have minimum credit scores that inhibit those looking to purchase from financing. However, my company offers loan programs down to 560 credit score. 560 - 580 credit scores require 10% down or 0% for veterans, 580+ require 3.5% down or 0% for veterans. 640+ may qualify for down payment assistance. I would be happy to help. contact me at (847) 815 - 8229, Thank you. Larry Bernstein.
0 votes Thank Flag Link Wed Aug 27, 2014
Hi Yolanda,

Are you still looking for a house to rent or buy? Give me a call I'll help you understand the process.

Shaunta Gray
Coldwell Banker Residential
0 votes Thank Flag Link Thu Aug 21, 2014
A good Realtor can help you out. Rent to Own is very rare in Chicago though. Consider buying instead.
0 votes Thank Flag Link Wed Aug 6, 2014
I work with a rent to own company through my real estate office. Please contact me and I will give you the information. I think it's a great program.
0 votes Thank Flag Link Mon Aug 4, 2014
Yolanda, those properties advertised as RENT TO OWN are not what you think they are.
The Dobb Franks Consumer Protection Act eliminated this segment of the predatory home lending market place. Knowledgeable property owners are simply providing you a place to rent with a forced saving plan to a CD. You will have no control interest in the property, meaning, you are NOT buying.

If you were allowed to buy, at your sole discretion, you could bankrupt the owner. Read my blog regarding this topic. A knowledgeable property owner will not take this risk.

The good news is, you are going in the right direction. Find an economical place to rent, reduce your debt, increase your savings, pay your bills on time, improve your income and shortly you will be able to BUY are home without being robbed by those who misdirect you.

Now would be a good time to call a Chicago REALTOR to discuss your goals and have the REATLOR plug you into the right resources.
Best of success.
0 votes Thank Flag Link Fri Aug 1, 2014
Work with a Realtor to help you understand the process.
0 votes Thank Flag Link Thu Jul 31, 2014
I would get a good Realtor to help out. Regardless, I would either buy or rent, not both.
0 votes Thank Flag Link Wed Jul 23, 2014
It's a pretty straightforward but expensive process. You find an owner willing to sell the home to you at a future time at a set price. Until you have the downpayment, you put down a deposit and pay a little extra on top of your rent each month, perhaps $500. Some of that extra payment gets applied towards your downpayment.
Web Reference:
0 votes Thank Flag Link Sat Jul 19, 2014
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