Understanding a Lease to Own Purchase

For a family just starting out a lease to own purchase can be a great solution if there is a willing homeowner. The following article will cover briefly what a lease to own purchase contract is.

Down Payment

When entering a lease to own contract you will need to provide a down payment against the final purchase price of the home. Unlike a traditional down payment, a lease to own down payment is equivalent to a first and last month rent and usually a modest security payment.

Lease Payment

The lease to own contract includes a monthly payment like a rent but this payment is deducted from the final purchase price of the property.

Time Limit

Every lease to own purchase agreement includes a time limit. This is the contracted amount of time the purchasers have to live in the home until buying it.

Final Purchase Price

At the end of the time limit the purchasers will pay the intended amount for the property. This is less the down payment and the accumulated payments over the course of the time limit.

Purchase Option

At the end of the time limit the purchasers have the right to pay the difference of the final purchase price, extend the lease or vacate the property.