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Lease-to-Own Home Offers
By Kerry Oman | August 1, 2011
If you’re getting ready to look at Springville real estate, there is so much more to consider than just the houses themselves. When it comes to buying a home, you also have to consider how much house you can afford as well as the financing options available to you.
One of the less common financial options (but one that is growing in popularity) is the lease-to-own or rent-to-own scenario.
What does a Lease-to-Own Mean?
Most people associate leases with cars, especially luxury cars that might otherwise be out of an individual’s price point. In this agreement, you get to “try out” the vehicle for a pre-determined amount of time and at a pre-determined monthly cost. If, at the end of the lease, you decide you want to keep the car, a portion of your payments is directed toward the purchase price. If you decide not to keep the car, there is no further obligation.
Leasing a house is much the same. In this scenario, you typically have up to three years to live in the house and make regular payments (the timing may vary depending on your exact lease agreement). You can then decide whether or not to buy the house and apply some of your monthly payments to the purchase price.
Why Lease-to-Own Home Options Work
In the Springville real estate market, lease-to-own homes present a unique opportunity for families who might not otherwise be able to buy their own house. That’s because if you don’t have enough money for a down payment, you typically don’t have to worry, since your months of paying in rent or lease money will be applied toward the house and act as a down payment. At the same time, this plan can help you if your credit rating isn’t very high. As long as you make consistent lease payments and work to improve your credit score by paying down other debt, you should be able to prove your commitment and financial security to the lender.
Other benefits include “trying out” the house before making a long-term commitment. If the neighborhood doesn’t suit you, or if you decide you’d like to spend less on a home or find one with a larger yard, you can walk away at the end of your lease agreement without losing too much time or money.
Lease-to-own options can also be a great plan for homeowners. In a tough market, this kind of flexibility can entice buyers and help you get your home off the market faster. You also get a chance to make money over the long-term, since you can charge monthly rent as well as option money, which is what the leaser pays in for the option to someday purchase the property.
How to Find a Lease-to-Own Option in Your Area
In most cases, this situation is set up by the individual selling their Utah County home. Because it is their property, they will set the terms of the agreement and draft a contract that you will either sign or decline. It can be very easy for a lease contract to heavily favor one party over the other, so it’s best to have a real estate lawyer or qualified agent on hand to inform you about all the fine print.
Ask Kerry Oman for more information on lease-to-own options for Springville real estate or to learn more about your options when it comes to buying and selling a home in the area.
Topics: Springville Real Estate, Utah County Real Estate | No Comments »