- Introduction
- Acknowledgements
- 1: Getting Ready
- 2: The Costs of Space
- 3: Understanding Credit
- 4: Professional Services
- 5: Finding Space
- 6: Residential Leases
- 7: Commercial and Industrial Leases
- 8: Buying Real Estate
- 9: Types of Mortgages
- 10: The Mortgage Application
- 11: Ownership Models
- 12: Purchasing Alternatives
- 13: Chicago Zoning Ordinance
- 14: Chicago Building Code
- 15: Chicago's Neighborhoods
- 16: Property Taxes
- 17: When You Find a Property
- 18: Inspections
- 19: After Moving In
- 20: Insurance
- 21: Utilities
- 22: Rehabbing Your Space
- 23: Safe and Healthy Spaces
- 24: Green Practice
- 25: When Disputes Arise
- 26: Space Emergencies
- 27: Facility Development Planning
- Bibliography
Tips for Easier Financing
After reading the first part of this chapter, you might be feeling overwhelmed and discouraged about financing a property. Don’t be: You can prepare yourself for the purchasing process by reading this manual and locating resources to assist you. This section offers tips on making purchasing and financing easier.
First-Time Home Buyers
Many programs are geared toward first time homebuyers. Plan on completing the program before you start looking at properties, as they can take several weeks.
Homebuyer Counseling
Some mortgage programs offer lower down payments and other advantages to homebuyers. In order to access some of these programs, you might be required to attend a Homebuyer Counseling program, which will cover financial responsibilities of buying a home, credit repair issues and budgeting. Even if counseling is not a requirement for the loan you choose, you might benefit from the experience.
The Chicago Department of Housing has many homebuyer counseling centers throughout the city. Click for a listing of centers.
Low and Moderate Income Earners
As with first-time buyers, many programs also serve low- and moderate-income earners; many artists fit into this category. Begin your search for these types of programs in Residential Mortgage Assistance. These programs may take several weeks or months, so complete the program before you start looking at properties.
Pre-Approved Mortgage
Arrange for a "pre-approved mortgage" before you start looking for a property. Pre-approval means exactly that: The lender has reviewed your credit-worthiness and agreed to provide you with financing for a certain amount at an approximate interest rate. Because interest changes on a daily basis, the lender will typically lock-in a rate for you after you’ve put in a contract on a property. A pre-approved mortgage offer is usually valid for 90 days while you look for a space.
Pre-approval has another benefit: When you find a property, you can make a firm offer to purchase, rather than an offer conditional upon your ability to arrange financing. In a competitive market, especially for affordable live/work space, this will be an advantage. Note, however, that the lender reserves the right to approve the actual property before a final agreement is reached.
Predatory Lending
As you look for financing, beware of predatory loans, which usually have many hidden clauses and penalties, high interest rates and points, etc. These loans ultimately serve to defraud you out of your property. For additional information, contact the Chicago City Treasurer’s Predatory Lending Program at 312-744-3365 or click:
- Chicago City Treasurer’s Predatory Lending Program
- City of Chicago Predatory Lending Ordinance
- Information on the types of predatory lending.
TIP: Secure your financing before you go looking. This allows you to target your search within your price range and make a firm offer when negotiating. Your real estate professional should be able to help you secure financing.