One of the great advantages of owning your own home is the equity you build over time. The more equity you have in it, the more options you have if you ever become strapped financially. You can always sell the house, but that can take months depending on the market. If you need cash now and want to stay in your home, there are better options available to you.
Second Mortgage
When you get a home equity loan in Chicago, or anywhere else, you’re basically taking out a second mortgage on your house. If you’re approved, you receive a lump sum that has to be repaid over 10 to 30 years, depending on how your loan is structured.
Disadvantages:
- It requires a lengthy appraisal process
- You can’t get the cash you need right away
- An equity loan can be difficult to get if you have credit problems
- The home is collateral. If you run late on loan repayments, you risk foreclosure
Home Equity Line of Credit (HELOC)
A HELOC works like a credit card. You can borrow against the equity in your home whenever you need the money. There is a draw period, usually ten years, in which you can take specific sums of money out. After that comes the repayment period, which is usually 20 years.
Disadvantages:
- It will take a while to get the cash you need
- It can be difficult to get the HELOC if you have credit problems
- Interest rates are variable. They can go down, but they can also go up.
- The home is collateral. If you run late on your repayment plan, you risk foreclosure
Reverse Mortgage
This is a plan usually marketed to senior homeowners on fixed incomes. They use the equity in their homes to get cash either in a tax-free lump sum, or as monthly payments (also tax-free). This eliminates monthly mortgage payments.
Disadvantages:
- As fees and interest accumulate, the loan balance increases
- Assets decrease leaving less to heirs
- Heirs can inherit the home but must repay the loan
Sale and Leaseback
With a sale and leaseback, you sell your home to a third party and then rent it back. This plan gives you cash in hand quickly and allows you to stay in your home for an agreed-upon period of time.
What are the advantages of a sale and leaseback?
- Get cash quickly
- Don’t need good credit
- Can qualify even if you are unemployed or have tax liens
Who is a good candidate for a leaseback?
Homeowners who need fast cash. This is the number 1 reason homeowners choose a sale and leaseback in Chicago. You may be facing a situation in which you need cash more than you need to be a homeowner. A sale and leaseback gives you quick cash and an end to high mortgage payments.
Homeowners who are unemployed, or have credit problems. It can be hard to get a home equity loan or line of credit if you have a credit problem or have suffered a job loss. Even if you get the loan, you are still facing monthly payments with interest and fees in addition to your original mortgage. A sale and leaseback is a home equity loan alternative that gives homeowners a chance to recover from a financial setback and get back on their feet.
Homeowners who want to buy a new home, but don’t want to pay 2 mortgages. Most people can’t afford 2 mortgage payments. A leaseback program solves the problem of having to wait to move into your dream house until you sell the old one. You can take your time selling, especially if the real estate market is sluggish, until you get the deal you want on your old home.
Homeowners who are waiting on new construction. Building a house takes time, sometimes more than anticipated. You don’t want to sell your old home and then have to scramble for someplace to stay until your new home is completed. With a leaseback, you can sell your home for fair market value and continue to live in it.
Homeowners who are worried about a future slump in the real estate market. It’s hard to tell what the real estate market will do. It might be great right now, but what about when you’re ready to sell? If you know you’ll be selling in the next 2 years, but are concerned about a downturn in the market, you can sell now and get the money you want with a leaseback.
How Does SKYDAN work?
SKYDAN is a real estate investment company, not a lender, mortgage company, or a bank. We partner with homeowners who want to use the equity in their homes to regroup after a financial setback, job loss, or need cash quickly for any reason.
We will buy your home and rent it back to you for an agreed-upon period of time – up to 2 years. Your rent is deferred (no monthly payments), freeing up the cash you need to pay bills, find employment, and improve your credit. At maturity, you have 2 options.
- Buy the house back from us at the agreed-upon price (deferred rent added to the original purchase price)
- Sell the property. You keep any profit over the amount owed to SKYDAN.
If you can’t meet the stringent requirements necessary to get a loan or line of credit from a bank or mortgage company, we can help. You don’t have to be forced into foreclosure because of bad credit, a job loss, or the IRS.
The process is quick and easy.
- Qualify: Bad credit, no credit, unemployed, high debt? No problem.
- Home Visit: Within 3 to 5 days, one of our professionals will be on-site to evaluate your property.
- Evaluation: It only takes 7 – 10 days to value your home and determine how much you qualify for.
- Payment: Within 30 days, you can have as much as $250,000 cash in hand. (The actual amount is based on property value)
If you live in Cook County, Will County, Kendall County, Kane County, Lake County, or DuPage County, Illinois, give us a call today. We want to help you get the cash you need to regain your financial footing and put your mind at rest.