RentToOwn-HouseFinder.com
Lease to Own ?? for a newbie?
i have never bought a home and am considering this option. what are the pros and cons of this deal. also, anyone familiar with this kind of deal, what are the details: how much willl i be paying in the end for the house ? why does he talk about refinancing in 5 yrs ?? is my whole lease payment going towards payment of the total price ?? and any other feelings about this deal and details i should know about -- thanks a bunch in advance = The Appraised Value was $376,000 about 1year ago. I have two mortgages the first lien is 300,000 Monthly payment is 2711.02 includes principal interest taxes and insurance. The second Lien is $75,000 payment 651.26. Total Monthly payment is $3362.28. You will receive the same monthly payment I pay the lender. Down Payment is $10,000, I have a 30year Mortgage with a 5 year ARM, our goal is for you to refinance within the next 5 years in your name with a bank.The house will be put in a Trust- You will receive all the tax benefits sorry, all of these details are those listed under the "buy" option for the house -- there is another set of terms for lease only --- i'm only interested in this "buy" option, so maybe that helps ?? sorry for the confusion
Public Comments
- You need to talk with an attorney on this one. Typically, you lease the house with an option to buy it...in this case 5 yrs. Whether any payment goes to the purchase price is between you and the "Seller". You need to get that clear up front. You put down the "option" money...in this case $10,000 and most of the time this in non-refundable. If you decide not to exercise you option to buy...the "seller" keeps your 10K. I'm also not sure why it says you get the tax benefits. That would imply that you are actually buying the house right now rather than leasing it. The lease and the option to buy are usually two seperate documents. As for the 5 years...You are leasing the house for 5 years at which time (or before) you can buy the house by arranging your own financing. At the end of 5 years, you either "buy" the house by exercising your "option" or walk away. If you want to buy it, you need to get a loan. The "Seller" will then want his or her money. Hope that helps a little...but I would talk with an attorney who knows lease options. Lease options can be good things. Who knows what may happen in 5 years. What if you have a job transfer? This way, you walk away...the "seller" has made the 10K you put down plus has 5 yrs of payments more in equity in a house he can turn around and lease option again. A win-win for everyone in this case. Again...make sure the seller is clear on what is going on...the person leasing the house usually doesn't get the tax benefits because technically they are not buying it until the exercise the option. If it does get recorded as a sale and you do get the tax benefits, you may get screwed by the Due-on-Sale clause. If the bank he/she has the loan with finds out, they could call the loan due. If that happens, the seller has about 45-60 days to get the place paid for at which point he/she will tell you to exercise your option. If you can re-finance that fast...you've lost everything. Your 10K and the right to buy the place in 5 years.
