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Buying a house is everyone's dream, however, very few people are able to arrange the finance to do this, because of a number of reasons, rejection of mortgage loan application, low income or bad credit. No matter what the reason is behind the inability to arrange the finances, if you are unable to buy the house now, then you will never be able to get it. Owning your dream house is now possible with a lease purchase agreement.
The lease purchase agreement is a contract between the buyer and the seller, under which the buyer makes an agreement to buy the house after a few years or months. The advantage of the lease purchase agreement is that you would not have to make any heavy down payment immediately for the house and you have enough time to save money for the house.
When you enter in a lease purchase agreement, you will have to make a small payment of about 3% of the value of the house. This amount can be lower or higher as per the choice of the seller. Apart from this amount, you would also have to pay a month's rent in advance as deposit. After making this payment, you can sign a lease purchase agreement or a lease option. With a lease option you are not bound to buy the house, however, if you wish to do the same at a later stage then you can opt to buy the property. If you sign a lease purchase agreement then it requires you to purchase the property when the lease period comes to end. In both the cases, your deposit will be non refundable.
In both lease-purchase agreement and lease option, you are required to make monthly rental payments for the house. The rental amount towards the home is typically specified in the contract. When you start making the rental payments, then one part of the payment would go towards the purchase price of the house so that it becomes easy for you at the end of the lease option. The lease period can be extended with the consent of the seller. Hence, it is important that before you decide on the lease period, you should calculate the time that you will take to arrange the finances for buying the house.
It is important that you have the lease purchase or the lease option agreement verified by a real estate lawyer, so that it can be determined that the agreement is as per your conditions and the real estate laws of the state where you are opting for the lease-purchase agreement.
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