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Also known as Rent to Own or Lease Option, a Lease Purchase is a financial arrangement that combines Residential Lease with a Purchase Agreement.
Property ownership has become the pinnacle of real estate investment. As a result, business owners are seeking ways to purchase properties. One of the solutions is a lease purchase option. Lease purchase options allow business owners an opportunity to buy the property at some point in the future. This combines the security of a long-term lease with the ability to build equity through property ownership if the business warrants this type of infrastructure investment
You’re leasing a house with an option to buy it at any time during the lease term for the price set upfront. Each month, part of your rent goes towards the purchase - RENT CREDIT (you're not throwing your hard earned money away anymore, you’re building equity!)
In most cases, the down payment is ONLY 5%, and it is called “Option Consideration.”
Both the RENT CREDIT and the DOWN PAYMENT go towards the purchase price and secure your exclusive right to purchase the property from us during the period of your lease.
Lease Purchase Advantages
1) Small Amount of Up-Front Cash Required The amount of Option Consideration (down payment) is around 5% vs. 10-30% down payment required in conventional purchase. The closing costs are only $150 to $300 vs. $2K to $4K in a conventional purchase. So instead of wasting money on closing costs, you can have that money working for you. 2) Profit From Appreciation & Equity Buildup By doing Lease Purchase you lock up the price of a home up front. During the term of the agreement the price of the home will not change, even if home values in the area increase. If you just continue leasing where you are right now, you will likely discover that a year or two from today you will have to pay 10%-15% higher price for the same house you wanted to buy now. Why do that, when you have Lease Purchase alternative? And not only do you profit from potential appreciation, but you build equity every single month through the rent credits. Many times the equity build-up is faster (better) than if you had a bank financing – see the example below. 3) Time To Obtain The Best Financing You buy yourself some time allowing you to work on whatever is stopping you from getting a loan today, your weak link. You must correct your credit, build up the down payment, or work up a consistent income from self-employment. There is no pressure, no rush and you can search for the best financing available. Most lenders will consider Lease Purchase as a partial ownership allowing you to “refinance” instead of treating it as a “new purchase” loan. That will save you some fees.
The 3 Advantages Of Creative Home Solutions Now “Lease Purchase Program”
Pride Of Homeownership Feel what it's like to be a homeowner, not a tenant! Watch for your boss, co-workers, and friends' reaction, once they learn you purchased a home. There is something special that goes along with home ownership status.
Equity Build-Up Each month, part of your lease payment goes towards the purchase price of your home! Your money is finally working for you, instead of paying down the Landlord's mortgage.
Guaranteed Purchase Price Most of the time your price is locked in up-front (today) for the term of your lease. So, you benefit from any potential appreciation.
If you have more funds to put down on your new home, say around 10%, we can approve you for our “Owner Financing Program,” where you get full ownership immediately. And you get to enjoy these 3 extra benefits, In addition to the ones mentioned above.
Mortgage Interest Write-Off The interest that you pay on your loan is tax deductible when you have full ownership. So, it lowers your effective monthly payment. Property Taxes Are Tax Deductible In addition to your interest write-off, you can write-off the property taxes, which further lowers your monthly payment. Principal Paydown Your loan balance is being PAID DOWN, which is in effect, increasing your equity.
If you have at least 3-5% for a Down Payment and a sincere desire to own a home, we can and will show you how. Regardless of Credit History, Job Status, or even Bankruptcy...
By joining the Creative Home Solutions Now preferred Buyers List, you will be notified as soon as a new home becomes available in your area. This way you get the first shot at these great “no-banks-required” homes.
Call us at (920) 341 5221 or Click the button below to get started!