Deciding whether to buy or lease a home can be tough. There’s so much that goes into it. Why not get the best of both worlds with a lease purchase option?
A lease purchase option is basically a rent-to-own option. You’ll sign a contract with the house seller to lease the house for a while and then to buy it after that. Sometimes the contract says you’ll buy at today’s market value, and sometimes you’ll buy at whatever the house is valued when you lease purchase it in one to three years.
When you use a lease purchase option, you need to consult with a qualified real estate lawyer to draw up the lease purchase contracts. This type of option can be very complicated. Basically, you make one lump sum payment to lock in the purchase. It can be small or a substantial amount, and it won’t count as a down payment on the home.
After this original lease purchase payment, you’ll make monthly lease payments for a certain amount of time. Part of your lease purchase payments will go toward your eventual purchase of the home. This is a great way to have some forced savings, even though your lease payments will probably be over market value for rent of the type of home you’re getting.
A lease purchase can be a good way to buy a home if you don’t have a down payment or the best credit. Talk to a seller whose home has been on the market for a while for the best chances of getting this option for your home.