is a Lease Purchase ?
lease purchase is a combination of a real estate rental and
real estate sale. It is a lease for a fixed time period such
as 12 or 36 months with a provision that at the end of the
lease period, the purchase agreement portion of the contract
lease purchase allows a buyer to live in the home while you
establish your credit, save for a down payment or otherwise
prepare to buy. By buying a home with lease purchase terms
you also have time to create a good payment history, which
could help you in acquire a new mortgage are favorable rates.
lease purchase gives the buyer the option to lock in the purchase
price, then complete the purchase at anytime during the traditional
12-36 month lease period or as spelled out in the agreement.
the buyer in a lease purchase, you are obligated to complete
the purchase of a home or you may be subject to the loss of
your deposit. The seller is, legally required, during the
lease purchase period, to sell to you, and no one else. If
you have bruised or bad credit, that is repairable, a lease
purchase may be the best solution to home ownership.
Does a Lease Purchase Work?
purchase transactions usually require employment and income
verification and often a completed mortgage application, to
make sure that the buyer can afford the monthly lease payments
and will qualify for a mortgage at the end of the lease term.
Next, the deposit fee is paid in order to secure the current
purchase price as well as a future closing date. Sometimes
a portion of the monthly lease fee is applied to the purchase
price of the home. Then, you are paired with a mortgage specialist
to assist you with financing to close the deal. As the buyer's
ability to qualify for a mortgage improves, the buyer and
mortgage professional decided on when the purchase should
take place subject to the terms of the lease purchase agreement.