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Buying a House through Lease Options (2)

 

Five common reasons for buying with a lease option are as follows:

  1. In a strong buyer’s market, with lots of homes for sale, you may be able to rent for less than what would be a mortgage payment. But should you want to buy the home as soon as you feel the market has bottomed, try to negotiate an option to buy at the appraised value determined at the end of the lease.
  2. Your credit prevents you from qualifying right now, but in a year you can clean it up and are likely to get a loan. You find a home you love and offer to lease it for a year, with an option to buy it at a certain price and with certain terms.
  3. You’re new to the area and find a home you may want to buy, but you aren’t sure yet. A lease option may give you the time you need to decide.
  4. If a career change, new job, or job probationary period prevents you from qualifying for a loan right now, a lease option can buy you time. When you do qualify, you can exercise the option and buy the home.
  5. You are relocating and have found your dream home in the new area, but have a home to sell first. You can do a lease option on the new house until your old home sells and then close on the new one.

Although lease-option paperwork varies from state to state, it typically comprises two parts: the lease, which spells out the responsibilities of the owner and the tenant, the payment, the beginning and ending dates, any deposits, and so on; and the option to buy, which can either be a separate document attached to the lease or be included on one form. However it’s done, the lease option spells out in detail the purchase terms.

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