Yes! You Do Have An Option, But it's a limited time only offer!
So you think you've found the perfect house - but there are some
potential problems. It could be that your credit isn't quite
good enough for a low interest rate. Or perhaps you don't have
enough money for a down payment. Whatever the obstacle, you are
attracted to buying the home through a "lease with option to
buy" arrangement.
However, before making the decision - and definitely before you
sign the papers for this -- make sure you understand exactly
what this means. While it appears to be self explanatory, there
are a few "catches" involved in this option that you should be
fully aware of.
First, realize you are leasing the home for a specific and
finite amount of time. In many instances, this is two years. You
pay a lump sum at the beginning of the lease. If this were a
rental, it would be called a security deposit. In this instance,
it's termed an "option fee." This fee gives you the right to buy
the home during that pre-designated time for a price already
agreed on. Now, this is a great deal if you think you've found
the house of your dreams and you don't have enough money for the
down payment yet. And that "option fee" you pay at the time you
move into your dream home, in many cases goes towards the down
payment of the house.
But, as with most decisions in life, there are also drawbacks to
this method of buying a home. First, you may find yourself
paying a higher rent than the prevailing rate in your area. This
means your budget may be stretched a little during this year or
two. Bear in mind that the rent you pay could very well be
contributing to your eventual down payment for the house.
The other major disadvantage is that if you fail to purchase the
house before the lease ends, you may lose your option fee.
That's right. Instead of going to help bolster your down
payment, it only goes towards bolstering your landlord's bank
account.
However, for many people the "lease with option to buy" is a
viable and valuable chance at home ownership. As long as you
enter the agreement fully understanding what is demanded of you
- and when - and what the consequences of signing the lease are,
it could literally be your key to your dream house.
Don't jump into home ownership blind! Thanks to the technology
of the internet there are plenty of sites that provide valuable
information on real estate. One of the best is
www.a-real-estate-guide.com, a free site dedicated solely to
aiding your search for real estate purchases - whether it be a
first-time home, investment buildings, or a vacation or rental
property.
Www.a-real-estate-guide.com is also an invaluable tool if you're
planning on selling your home or rental property as well. Each
and every day, www.a-real-estate-guide.com provides you with
real-time news items focusing on issues of real estate and
housing. Whether you're actively engaged in the world or real
estate or just trying to keep abreast of current events,
www.a-real-estate-guide.com is a great source for all your real
estate needs.