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Lease To Purchase Option on a home I own that still has a mortgage?
I am in the process of buying another home and I am thinking about renting out my current house with the option to buy to my current roommate. I will still have a mortgage on my old house in addition to the new house mortgage. I have seen that with the lease to purchase agreements there is an agreed upon percentage of the rent payment that is applied to the purchase of the home. At first I thought about charging $1300 a month and applying $1000 a month toward purchasing the home. But since it is still on a mortgage most of the rent payment will not go toward the principal. What percentage should I change it to? My mortage on my current house is $1000. Thanks.
Public Comments
- Since it is a friend(?)/current roommate, it would be generous of you to credit the difference between the mortgage payments and the rental payments towards the balance of the purchase price. I would turn it around and credit her $300/month of the $1,300 towards the sales price. What about the taxes and insurance? Are the included in the $1,000 mortgage payment? You may want to include and escalation clause in the option agreement as well. For instance, he/she has the option to buy at one price for the 1st year and the price goes up 2/3/5% each year there after. That gives them an incentive to take you out more quickly. I hope this helps.
- the lender can call your mortgage due in full because you no longer reside in the property as you agreed to when you took the mortgage. Consult with a real estate attorney before you do anything
