Because getting a mortgage loan has become so difficult, more people are seeking alternative options to meet their housing needs. For many people, this simply involves renting a home when they would have preferred to buy. To some people, living in a rental home just does not feel right. They need to feel more grounded and as if the home is really their own.
Because of this, many people decide to go with a lease purchase option. This allows them to rent the home for a specific period of time, typically at least two years, and gives them the exclusive option to purchase the home during this time period.
This can be an excellent option, but there are several things that you should keep in mind.
Make Sure it is the Right Decision for You
Just because a lease option can be a good decision, does not mean it is the right decision for you. You should carefully examine your situation and make sure that this alternative fits your needs. A key factor in your success is going to be your commitment to credit repair. For many people, this can involve needing to make extra money so that you can pay off collection accounts and lower your overall debt load. Obviously, this is a serious commitment that is not going to be easy.
Because you will need to make a non-refundable option payment in order to secure a lease option home, you want to make sure you put yourself in the position to get a mortgage prior to the expiration of your option. If you don't have the commitment, chances are this will never happen.
Make Sure the Home Owner Really wants to Sell
You also want to make sure that you are dealing with a home owner who really wants you to buy their home. This may seem confusing but the reality is that there are many investors out there who are really nothing more than lease option scammers. Their intent is to structure the contract in such a manner that you do not have the opportunity to buy their home. Then, next year, they will collect another option fee from someone else and continue the cycle.
There are several signs that a home owner is not really
interested in selling. One is if they
push for a term that is a year or less.
The reality is that that does not give most people the time that they
need to improve their credit score. Because credit repair is key to your chances of success, this is something that should be of particular interest to them.