There are many ways to purchase real estate; but in these times there is a method proved to be most lucrative for those that want to buy a house but do not have the credit score or money needed for the required down payment – Lease Options. There are so many reasons that lease option purchases make sense, but mainly it allows those that would not qualify to purchase a home right now, be able to buy a home they desire.
The basis of the lease option purchase is that you will sign a contract to buy a house, yet you will not automatically own the property in question. The reason it is called “lease option” is because at the end of the lease term, you have the option to purchase the property at an agreed upon price. The terms of a lease option purchase are that you would actually be tenants in the home for a period of One, Two or Three years; then if you decide to exercise your option to purchase, you would attend the Settlement/Closing proceedings to take full and total ownership of the property. Most lease option agreements require a minimal deposit, which is used towards the purchase price of the home, if you choose to purchase. Payment terms are specified in the agreement.
The biggest advantage that you have when you get involved in a lease option agreement is that a portion of the rental amount that you pay will be set aside in a separate bank account and that money also goes towards the purchase price of the property. The opportunity to pay down the purchase price is one of the benefits to doing a lease option as opposed to renting. This is also a great opportunity for those who think that they cannot buy a house because they have less-than-perfect credit; type of purchase also gives you the time that you need to be able to pay down any debt.
There are different terms that a lease option purchase is known by: a Lease Purchase, Rent with Option to Buy, and Lease Option. These terms are all used interchangeably, so do not be confused, they all are the same thing. When you sign a lease purchase contract you are going to be able to move into the house right away and are going to be living there for the entire duration of the lease portion of the agreement.
Remember, a lease option contract is just that – an option. If you choose not to purchase the property at the end of the term – that is perfectly fine. In these economic times, banks are being very strict with their lending terms. Even people with perfect credit are finding it difficult to get approved. The whole point behind the lease option purchase is to allow you – the Buyer – to buy the home that you want, at the time you want.