| guy, and what you hope to gain.
Landlords/sellers:
1. A better tenet is a good reason to offer a lease-option. When the lease is what, we call "triple net," where the tenet takes care of the property and pays for everything you're almost out of the landlord business.
2. Sub-prime and/or adjustable rate mortgages often have "prepayment penalties," a lease-option with a good buyer, having made a sufficient up front payment can be a good way to wait out the penalty. See #1.
3. You need money now and are willing to trade equity for the cash. You need more monthly income than the market rent will provide.
4. The down side:
a; You're committed to sell the house at a fixed price.
b; During the term of the option you'll not normally be able to refinance or sell the property.
Tenets/buyers:
1. You'd like to buy the house, but for some reason you can't commit at this time. IE: You haven't sold your old house yet, your new job is tentative, in the near future you'll qualify for a much better loan.
2. You want to tie up the house you're renting, so you can buy it later for whatever reason.
3. You're going to, with the owners permission, substantially improve a house ( like, repairing an older home, landscaping a new home) and you want to protect your investment.
5. The down side:
a; If the option requires a substantial up front payment, or monthly premium you're likely to lose it.
b; If you don't qualify for a mortgage today you're not likely to a year, or two, or three from now, either!
c; Your lender may not recognize your equity. Don't mistake this with losing your equity, but the lender may not use the current market value of the house or your credits toward equity, when determining the loan to value.
d; You're committed to this house at a set price. If for any reason you don't buy this |
