| Rent-to-own/Lease Option program for Renter/Home Buyer | |||||||||
| 1) | What is Rent-to-own/Lease Option | ||||||||
| a) | You pay an initial deposit say ($6000.00) | ||||||||
| b) | You sign a contract (Lease Option) with the seller/current property owner | ||||||||
| to rent the house for 1 to 3 years and have the option (and not the obligation) | |||||||||
| to buy the house at a fixed price at the end of the term (1 to 3 years) | |||||||||
| c) | You make a monthly payment for rent and a lease option premium | ||||||||
| d) | Your initial deposit and a portion of your monthly payment (Lease Option | ||||||||
| premium) will be credited towards the purchase price of the house. | |||||||||
| e) | We will pay an extra $200 per month (you EARN $200 per month for Renting) | ||||||||
| towards the purchase price of the house when you buy it. | |||||||||
| (for every month that the rent and lease option premium is paid on time) | |||||||||
| f) | At the end of the term, we will give you 5% or 10% of the purchase price | ||||||||
| (for a 1 or 3 year lease option) as a credit for your down payment. You will then | |||||||||
| own the house with a lower mortgage payment than your monthly rent payment | |||||||||
| during the lease term (provided there are no significant increases in the interest rate) | |||||||||
| 2) | Who can benefit from a Rent-to-own/Lease Option Program? | ||||||||
| a) | "I cannot or do not want to put 5% to 20% of the purchase price to buy the house" | ||||||||
| b) | "I have a poor credit history for getting mortgage approval to buy the house" | ||||||||
| c) | "I do not have a steady income record/history to get the mortage approval for the | ||||||||
| house" | |||||||||
| 3) | What are the benefits to you, in a Rent To Own/Laese option program | ||||||||
| a) | Very little out of pocket expense to get started | ||||||||
| b) | A portion of the rental payment goes towards the purchase of the house in 1 to 3 years | ||||||||
| c) | No further down payment when you exercise the option to purchase the house | ||||||||
| d) | Lock in the purchase price now and profit from future property price appreciation | ||||||||
| e) | Control: With very little money, you gain the control of the house | ||||||||
| You can improve and maintain the house as it will be yours in a few years | |||||||||
| f) | Time: During the lease term you will have time to repair your credit history | ||||||||
| and build up your income history for the mortgage approval | |||||||||
| 4) | What is the catch? | ||||||||
| a) | It is a 1 to 3 year commitment | ||||||||
| b) | You need to like the house | ||||||||
| c) | If you do not exercise the option or default in your monhtly payments, | ||||||||
| the contract will be null and void. The seller will keep your option deposit and | |||||||||
| monthly option premiums | |||||||||