I am living in a house that is for sale and the person that is going to buy it said they might be willing to do a lease purchase with a tenant option with owner financing.
2 thoughts on “What does lease purchase with a tenant option mean exactly?”
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Means they lease the house for usually more than market value for a set period of time (usually 24 to 36 mos) until they can get their finances in order to get their own mortgage. They will have to pay up front an *option fee* and may also get a rent credit every month out of whatever they are paying. If at the end of the option or lease period if they choose or cannot get financing, they lose their option fee and any rent credit they were building during the lease.
Owner financing is totally different in that the owner acts as the bank and they actually own the house. In a lease option, the deed is not in the renters name until they get their own financing.
The thing that has to be spelled out though in these situations is WHO is responsible for things that break. Some lease options put that on the renter.
if you really like the house and you have an appraisal, go for it
[the appraisal is only if you care about the purchase price if you
actuate the purchase option in the future]