One thought on “How does lease/buy option work and is it a good idea?”
If you have marginal credit that may currently prevent you from getting a bank loan it is a great way to purchase your home. The way it works is that when you agree to the lease option, the seller charges an option fee and a price and time frame for purchase is set. A rent schedule is set up and sometimes a rent credit is given. The rent credit might be $75-$100 per month that will be applied to the purchase price when the option is exercised. If the buyers credit is good enough in a couple of years he/she can exercise the option and buy the house. If they decide not to buy the house the original option fee is forfeited by the buyer.
If you have marginal credit that may currently prevent you from getting a bank loan it is a great way to purchase your home. The way it works is that when you agree to the lease option, the seller charges an option fee and a price and time frame for purchase is set. A rent schedule is set up and sometimes a rent credit is given. The rent credit might be $75-$100 per month that will be applied to the purchase price when the option is exercised. If the buyers credit is good enough in a couple of years he/she can exercise the option and buy the house. If they decide not to buy the house the original option fee is forfeited by the buyer.