Why Your Credit is So Important
Credit is a financial tool that allows you to purchase things now without having to pay for them right away. Your ability to use credit and repay the creditors on time, determines how much access to credit you will have in the future. Building a solid credit history enables you to buy more when you need it. This can be very valuable when purchasing a home.
When you apply for a loan on a home, the lender will run your credit to determine how much of a risk you are. By that, I mean what is the risk that they will not get the money they lent you, back. If you have a history of not paying your bills on time, then you are a higher risk to the lender. The clients that are a higher risk to the lender typically have higher interest rates. This is a sure way to get the money back at least in interest. I like to look at this as sort of a punishment for not keeping up with your bills and damaging your credit.
Having good credit is essential and very important when purchasing a large investment such as a home. You can still purchase a home without perfect credit however you will end up paying more in the end.
If you have poor credit, then you may not be able to purchase just yet. There are many programs however that specialize in improving/repairing your credit. These specialists will help you repair your credit by explaining exactly what you need to do to raise your credit. They can even tell you how long it will take to get your credit where it needs to be to either purchase a home and/or qualify for a specific program.
OwnACondo.com offers a Rent-to -Own Program that is great for people who need extra time improving their credit. The idea of this program is to rent for a specified period of time and make extra payments each month that will go toward a down payment and at the same time build your credit.
Although having an excellent credit score is vital to receiving the best interest rates and in the end save money, there are still programs that are available for people who are in need of repairing their credit. Keep in mind that it is always easier to prevent bad credit then it is to fix it.
Chicago Condos
Chicago condos can be purchased with as little as no money down all the way to putting 25%-30% down. Times have changed things dramatically when it comes down to financing a Chicago condo. Condos that are typically lived, known as user condos, will demand less of a down payment versus a condo that is purchased for investment purposes. The user, the person who lives there, if they are buying it they would normally need between 3.5% to 5% of the purchase price for a down payment.
An example of this would be as follows. If you were to buy a Chicago condo and it costs $400,000, a typical down payment for the condominium would be 5%. 5% of $400,000 is $20,000. If you were to buy the same condo for investment purposes the down payment would be 25% or $100,000 down, quite a difference.
The bank financing a Chicago condo looks at the user deal and the condominium investment deal two different ways. They see an end user, the person who lives there, being more apt to pay for unit and not walk away. The person that lives there needs a home. The banks feel that if the person lives there, there’s a better chance that they will get their money back. For the investor, they already have their home. This is a Chicago condo investment. If the deal doesn’t turn out so good, they can walk away, not pay, and they still have their home. Of course, they would have a bad credit rating, a foreclosure to boot on their record, but people are more likely to walk away from an investment condo versus a condo that they’ll live in.
What does this mean? Investment condos need a stronger down payment than condos a person is going to live in. Why does the condo financing company choose 20% or 25% versus 15% or 50% as the down payment amount? They feel that 25% is a strong enough number that few people would walk away from this. Secondly, if the bank has to come in and foreclose on a property, 25% is more than enough to resell the property and get their money back. At 50% down, this number may be too high to get people to use them as a financing company. Over time, they’ve figured formulas out and this is what they’ve ultimately come up with.
If you’re looking to finance a Chicago condo and you need some guidance on where to get started, you can go to FinanceACondo.com. They have more than you’ll need to get started on owning your own Chicago condo.
Finance A Condo
You’ve found your favorite condominium to purchase. Now you need financing. Where do you go to finance a condo? To finance a condo in today’s market it can be a bit of a challenge, but certainly not impossible. Over 30,000 condos closed and were financed in the Chicago area in 2008. Someone was out there financing condos.
Financing companies generally look for a few things when financing a condo. They start out with checking your credit score. Each month all of your credit card companies, your auto loans, etc. will report to a credit bureau rating you on how you’re paying off your debt. The credit agencies take all this information and create a “credit score†for you. Banks and lending institutions take this score to heart and many times will not lend to a person if they have a score even one below what is required. It’s all black & white many times.Â
Most loans can get done with a credit score of 580 or above. People that are in the range of 700 or above are considered excellent candidates to give a loan to. The next step is your down payment. How much money will be paid cash for the condo and how much of the money will be financed. When financing a condo, the banks will look at many factors, but the more down payment you have, the better. If the condo you’re trying to purchase a condo for $200,000, typically you’ll need 5% of that in cash or $10,000. If you were to put 20% down or $ 40,000 the banks risk position is much less and it makes doing the loan almost a slam dunk.
So to summarize, financing a condo comes down to having a good credit score and having a significant down payment. Even with this as the main criteria, if you have a blemished credit score and zero dollars, there’s always ways to find a way to purchase a condo. For the tenant that wants to buy his or her condo but does not have a down payment, there are rent-to-own programs out there that allow you to utilize some of the rent payment toward a down payment. Secondly, the person without a down payment can borrow the money from mom or an investor. In the end, if you really want to finance a condo, it can be done. You just have to want it bad enough.
For more information on financing condos, you can for to “FinanceACondo.comâ€. They specialize in financing condos throughout the United States.
Our Rent to Own Condos
Dear potential condo owner,Â
OwnACondo.com has answered the needs of thousands by creating a way for many people to get into condo ownership where originally they''''ve been unable to. Our rent-to-own programs have attracted thousands to our condo company.  It''''s a perfect alternative in today''''s market place where lending has been extremely tough to get.
We have over 500 condo units to choose from throughout the entire Chicago area ranging from $600 per month in rent, all the way beyond $4,000 monthly. You pick and choose the style and size of the condo based on your affordability. The price of the condo is negotiated at the time of the rental and every transaction is different based on the buyer and seller needs.Â
I''''ve been in the real estate business for more than 24 years and have never seen these type of buying opportunities. This is a perfect time for a buyer to lock in a price of a Chicago Condo while renting for a period of time. Once the allotted time has ended, the buyer has the right to excercise his or her option to buy that condo. If the price of the condo has fallen due to market conditions, the buyer is not obligated and can either re-negotiate the price or pass all together. On the other hand, by locking in on a price, if the condo goes up in value, the buyer wins.Â
The seller's advantage is they now have an occupied unit with a tenant paying rent rather than a vacancy. Once the buyer is in the unit, they''''re more likely to buy the unit than move out. It creates a win-win for everyone.
If you''''re interested in talking with a Chicago Condo specialist on our rent-to-own programs, please call us at 866-696-2266.
Chicago condos
"I subscribe to the law of contrary public opinion," said Al Pacino's character Ricky Roma in the brilliant 1992 movie Glengarry Glen Ross. "If everyone thinks one thing, then I say 'Bet the other way'."Â
Plenty of condos, townhomes and houses are still selling around Chicagoland and around the nation, despite the fact that sales are down from the recent record-setting period. Who's buying? Lots of people who realize that a slower market is precisely the best time to buy.
But let's forget ficticious characters with clever lines in movies. In the 1980s when the stock market declined and interest rates went to double digits, Warren Buffet, who is now arguably the richest man in the world, coined the phrase "Wall Street had a clearance sale, so I bought." He understood the opportunity available when everyone else was selling. And you can bet that people like Buffet, Donald Trump and others are buying real estate in the current market.
Opportunity is abundant today in the condo market and you don't have to be a billionaire to take advantage of it. Choice is plentiful and negotiating power is high for buyers. Real estate remains the best way to build wealth over time. The market has pulled back from the ultra-fast annual appreciation and buying/selling frenzy of the last few years, a pace that no one expected could or would continue indefinitely. We're now returning to steady, solid growth in real estate.
The National Association of Realtors follows home prices and found that for the last 30 years, values increased an average of 6% per year, including the cycles. The time to get involved is now.Â
Give us a call at 866-696-2266 so we can help you get started on finding your dream condo for your residence or for investment. You'll look back and enjoy knowing that you had a contrary point of view.
Mortgage Interest Rates, Already Low, Take Another Dip
Freddie Mac reported that the 30-year fixed-rate mortgage rate averaged 5.87% for the week ending January 10, 2008. Freddie Mac said the rate is the lowest since September, 2005.
Who the heck is Freddie Mac? Well, many people wonder. It's a name seen and heard frequently in the media, often without a word of explanation. Freddie Mac is not a person, but a stockholder-owned corporation chartered by Congress to increase the funds that mortgage lenders can make available to home buyers and multifamily-unit investors. These lenders are mortgage bankers, credit unions, savings institutions and commercial banks.
Freddie Mac has been in existence for almost 40 years with a mission of providing a continuous and low-cost source of credit to finance America's housing.   Â
Learn more about this vital organization here, and be sure to contact OwnACondo.com at 866-696-2266 if you'd like more information from our preferred lenders about condo loans, how to qualify, and much more.
