Lease to Purchase....Options for Buyers

Are you renting and want to make the dollars spent on rent work for you? Credit shaky and you just need some time to get it fixed? Then you may want to consider a lease to purchase program.

I can help with a program that will allow you to effectively buy your home and give you time to qualify for a mortgage. This program combines a lease for a definable period of time and at the same time executing a purchase contract with a long close period. Lease to purchase allows you to move in to the home and the purchase contract allows you to tie the home down for as long as the owner is willing to give before the purchase contract must be executed. Typically 1 year from you initial lease date.

Why is that good? A one year closing allows you to work on credit problems and put together a great down payment. Often you can apply a portion of each month lease payment towards the down payment or closing costs!  At the end of one year, you will be able to purchase your home providing you have met the terms of your contract and you have been approved for your home loan.  

The lease and the purchase are two contracts. This is very important to protect yourself. This means the security deposit (refundable) used for the lease can not be used for earnest money on the purchase contract. The purchase contract requires earnest money down which may be non-refundable. As you can see it can require some cash to make a lease to purchase program work for you while you are fixing your credit problems. If you are offered a single contract for a lease purchase you should always contact a lawyer who specializes in real estate to read the contract and provide you with critical information needed to protect your rights.

A option to buy and lease program combines the lease contract with a paid for option to purchase the home over a certain time period. The property sales price is not fixed and you may only have 2 to 7 days to decide if you want to purchase at the time it is offered. During the term of the lease, but before the option expires, the tenant/buyer has exclusive right to buy the home under the terms to which both parties have previously agreed. You typically pay a non-refundable option fee for the right to purchase the property before some else can.

Lease to purchase is more definable and you can chart out a time line that works for you. A lease to option program typically takes less up front cash but you maybe required to make a purchase decision when it is not convenient for you. So weigh each method carefully.