Wendy Polisi

3 Reasons Buyers Rent to Own

Lease purchasing a home can offer several key benefits to buyers over simply renting.  In addition to affording them the opportunity to qualify for a mortgage, they are future homeowner is able to begin building equity immediately as well as taking advantage in any positive upswings in the market.

3 Reasons Buyers Rent to Own

For many people, success is defined as a promising career, a nice house, a couple of children, and close friends.  So, buying a home is a big deal. Many consider it to be the realization of a lifelong dream!

But, if the bank does not share in that vision, buyers are choosing to sign lease purchase or rent to own contracts.  Following are three reasons buyers use lease purchases, rather than simply renting.

With a lease purchase, potential buyers have:

1.         Time to secure a loan

2.         The ability to build equity in their home

3.         Hope for a change in the market

In essence, a lease purchase is a means of keeping the dream alive a little longer, so it can become a reality.

Time to Secure a Loan

The main reason people choose to sign a lease option contract is the ability to take possession of their dream home, while trying to get a loan from a bank or other lending institution. In most cases, the potential buyer does not qualify right now, but they might in a year or two.  So, to keep the house from being sold to someone else, they are willing to rent to own for a time.

Equity in the Home

A properly structured lease option will provide the potential buyer with some sort of rent credit.  A rent credit is the portion of the monthly payment that will be applied to the purchase price at the time they are able to qualify for a mortgage.  Often, depending on the lender and the market conditions, the buyer will have to come up with a very limited amount of additional cash when they purchase the home.

Hope for a Market Change

In addition to allowing someone to enjoy their dream home today, a lease option allows the future homeowner to take advantage of any positive market changes.  Because the purchase price is locked in today, there is the potential for the home to have appreciated at the time of purchase.  Then, the buyer can either purchase the house and turn around to sell it for a tidy profit or continue to live in the home with considerable equity. Either way, they come out ahead!

In short, there are several reasons that it can be advantageous for someone to choose a lease option over renting. They are able to secure their dream home, while building equity and investing in their future today.

Article Tags: Reasons Buyers Rent, Reasons Buyers, Buyers Rent, Lease Option

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