There is a growing trend among home owners today known as the lease to buy option. This can be a great advantage to those who are struggling to acquire loan approval. It carries with it several distinct benefits worth a lot of consideration.
A lease to buy option is a contract that allows the renter to lease the property with the option to buy once the lease has expired. Prospective home buyers with poor credit are finding it creates an opportunity for them to repair credit while living in the home they wish to own.
The lease to buy option prepares the renter for ownership. This is definitely a benefit for the renter and provides an incentive for improving credit scores and paying off debt.
Sellers will find it advantageous because it means homes that sat vacant can now bring in cash flow. Even if the first renter does not buy the home, the lease to buy option can be offered again in the future to another who will. Either way, rent is still coming in and the home remains occupied.
While the lease to buy option is certainly not a new concept, it has gained momentum over the past several years. There are a number of reasons why it may be appealing to prospective buyers.
As mentioned above, those with bad credit will have the opportunity to repair and rebuild. If the buyer is renting from the seller then decides to purchase the home, no move will be necessary.
Some renters aren‚Äôt sure if they are ready to take on all the costs and responsibilities of home ownership. Leasing to own gives them the chance to carefully consider all the implications and thoroughly examine the situation before making a final decision. Here the renter has the opportunity to test drive home ownership.
Individual sellers are beginning to consider the lease to buy option as a way to resell their homes. Such is also the case with developers who find themselves with multiple properties they aren‚Äôt able to unload.
The lease to buy option isn‚Äôt right for every renter wishing to become a home buyer. Before delving into such a contract, it is important to carefully examine the specific terms. Different contracts will present different terms, and understanding them will be the key to making the right decision.
Renters with an impeccable leasing history will be better candidates for the lease to buy option. This is because it shows they are responsible and will most likely be able to make a monthly mortgage payment. Those with a history of money problems will have the opportunity to regain footing and improve their prospect of becoming a home buyer in the near future.