Lease Purchase
Lease Purchase in Atlanta GA:
What it is, and its advantages to both buyers and sellers.
Lease purchase is a purchase of a house that is implemented over an extended time period. To be more exact, the buyer and the seller agree on a price (or they can wait and go with the market price at the time of closing of the deal) for the house ahead of time, and the buyer pays monthly rent until the appointed time. Thus the buyer has time to build up his credit and do whatever else necessary to qualify for the mortgage. Basically, the buyer is the owner of the house, but does not officially get the necessary documentation until after the contract for the sale of the house is closed.
The above paragraph gives a concise definition of a lease purchase. Now we will look at some of the advantages of lease purchase for a buyer.
In most cases, a portion of the monthly rent paid to the seller is credited toward the purchase of the house. For example $200 out of a $1000 monthly rent may be credited to the buyer as down payment at the time of closing of house.
The buyer has an opportunity to live in the house and "try it out" before he commits to buying it. Thus if he discovers any defects or major shortcomings, he can opt out of purchasing the house.
The buyer earns extra time to build up his credit and work toward qualifying for a mortgage. This is specially helpful if he doesn't qualify yet, but has a good chance of doing so in a few years.
There are advantages for sellers too in lease purchase.
Following are some of them:
The buyer (or tenant) takes care of the maintenance of the property. Thus, the seller (owner) is worry free from fixing regular wear and tare items. Those are the buyer's responsibilities.
The seller locks-in a reasonable price for his house, and has the peace of mind that the house is going to be sold or the security deposit which the buyer paid will default to the seller.
The seller receives monthly income from the house until the buyer qualifies to close on it. In most cases, this income is more than the monthly mortgage payments owed by the seller on the house.
Thus, As you can see, lease purchasing offers advantages to both buyers and sellers. It is an innovative way of closing on a house when the buyer does not qualify yet, but has a good chance of doing so in the future.
Lease Purchase
By: George777
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