Buying a house is not as easy you think especially for the salaried person who is living on rent. In such a situation, saving up for the upfront payment, while maintaining a reasonable credit score, which is the base requirement for a mortgage program. So, if you are planning to buy a house without paying for a hefty upfront payment or a lengthy lease, then opting for a lease to purchase program is a great solution, which you should consider. The best thing about this program is it offers more flexibility to the buyer than the mortgage holder, in terms of payment, credit, security, and much more.
Here in this article, we have provided you with 5 reasons for the importance of buying a house via the lease-to-purchase program and how it could help you with your goal or ambition to become a landlord.
4 Reasons to opt for Lease to Purchase Program
Minimum Upfront Payment
The first thing that this program offer is reasonable upfront payment. If you are wondering how, it is possible when the mortgage or loan program doesn’t offer this, then here is an example. Try to recall the ‘Friend’ who always brag about buying a house for $1. It can only be done via rent or lease to own program because it offers minimum upfront payment and the buyer can decide on the payment. Moreover, always remember it is non-refundable. This means upon canceling the lease contract you will be given your credit amount back with an upfront payment deduction.
In addition to this, the criteria for lease to purchase is easier to meet unlike in the mortgage that has over 650 credit score requirements. Still, the mortgage payment varies as your credit score goes down. Along with this, you need to have a stable income source, documentary proof of paying the rent on time, a 401K plan, etc. which in lease to own home program doesn’t require. This means if you manage to fulfill the minimum requirement then you can qualify for the program.
Set Your Terms & Condition
On top of having simple criteria, it also allows the rent-to-own home aspirants to set their conditions which is applicable during the lease period. Under this, you can negotiate the maintenance cost with the seller. Moreover, you can also negotiate the responsibilities of paying the insurance fee. The cherry on top of this program empowers tenants to opt out of the deals if the house doesn’t fulfill the requirement. Well, selecting or deciding on the dream house is not easy, it requires a lot of effort from ensuring the proximity and the vibe of the house itself. All of these things and freedom are not available in the mortgage plan. So, if you want to take your time in selecting your dream house and don’t want to waste your money then it is recommended that you should give a try to the lease to purchase program. Since it gives you the freedom to experiment with the house and you can save up a reasonable upfront payment while paying for the rent, a great win-win situation for both.
Save Up for A Deposit While Leasing
The last reason behind our suggestion is the deposit saving. Well, the process of the lease to purchase a home is different than the mortgage. Under this program, you pay more rent than the average market and save up. There are two reasons behind paying hefty rent. First, it includes the rent credit and secondly, the lease duration is long, therefore the prices are higher to match the local real-estate trend.
The best way to secure a house when you are juggling with paying rent and insurance is to get a house through a mortgage. However, not all people can afford or fulfill the basic criteria. In this case, going for lease to purchase is considered a reliable solution. There are two reasons behind this, first, the tenant can opt for customized rent, and second, the lease period is short. This means if you don’t like the house, you have leased you can always opt-out. Hold on! there are two types of contracts, hence it is recommended that you discuss the details with your realtor, agent, or lawyer, before signing an agreement.