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Lease Option
A lease option (or lease purchase) is a type of contract used in residential real estate. The contract is typically between two parties: the tenant (also called the lessee), who will occupy a house or apartment, and the landlord (lessor), who owns the property.
During the term of the lease option, the tenant pays rent to the landlord, and in exchange is permitted to occupy the property. At the end of the contract, the tenant has the option to purchase the property outright; the tenant would typically obtain the money to do this using a mortgage. In exchange for this option, the tenant pays extra money to the landlord, in excess of usual market rent.
Excess rent may also be applied towards the eventual purchase of the property, or towards the down payment for a mortgage. In that case, the lease option works as an automatic savings plan for the tenant.
Lease options are often used by tenants with a poor or limited credit history, who would not qualify for a typical mortgage. The lease option may carry less risk for the landlord than a mortgage would for the lender. In the event of non-payment, it may be possible to remove the tenants through eviction, which is likely to be cheaper than foreclosure on a mortgaged property. The lease option may also require less money up front, while a mortgage might require a substantial down payment from the tenant.
If the tenant does not exercise the option to purchase the property at the end of the lease, then the money that the tenant paid for this option was wasted. This might occur if the tenant no longer wishes to purchase the property, or if the tenant wishes to purchase the property but is unable to obtain the financing required to do so. Some forms of lease option have been criticized as predatory, if a lease option is sold to a tenant who cannot realistically expect to ever exercise the option.
During the term of the lease option, the tenant pays rent to the landlord, and in exchange is permitted to occupy the property. At the end of the contract, the tenant has the option to purchase the property outright; the tenant would typically obtain the money to do this using a mortgage. In exchange for this option, the tenant pays extra money to the landlord, in excess of usual market rent.
Excess rent may also be applied towards the eventual purchase of the property, or towards the down payment for a mortgage. In that case, the lease option works as an automatic savings plan for the tenant.
Lease options are often used by tenants with a poor or limited credit history, who would not qualify for a typical mortgage. The lease option may carry less risk for the landlord than a mortgage would for the lender. In the event of non-payment, it may be possible to remove the tenants through eviction, which is likely to be cheaper than foreclosure on a mortgaged property. The lease option may also require less money up front, while a mortgage might require a substantial down payment from the tenant.
If the tenant does not exercise the option to purchase the property at the end of the lease, then the money that the tenant paid for this option was wasted. This might occur if the tenant no longer wishes to purchase the property, or if the tenant wishes to purchase the property but is unable to obtain the financing required to do so. Some forms of lease option have been criticized as predatory, if a lease option is sold to a tenant who cannot realistically expect to ever exercise the option.
Rent To Own
Rent to own (RTO) is a means of acquiring ownership over time without taking on debt. RTO companies rent items, most typically furniture, appliances and electronics, with the condition that the item will be owned by the renter if the term of rent is completed. Since rent to own stores do not require a credit check or down payment, they are popular with sub-prime-credit consumers; those with damaged or no credit history. RTO is also popular with corporate travelers on temporary assignment as there is no long term commitment involved; An item can be rented and returned at any time without penalty.
RTO is a lease, as opposed to a credit sale, so no interest is charged.
Industry-wide, 75% of all RTO transactions are weekly; the consumer agrees to pay a weekly amount for leasing property. The remaining 25% of agreements are biweekly and monthly. RTO agreements are generally written for a 12, 18, or 24 month term. If the consumer rents the merchandise for the full term, ownership is acquired. Most RTO transactions include an early buyout clause that allows the consumer to purchase the merchandise at any time during the term for 50% of the remaining rental payments.
A consumer may return a rental item at any time without penalty. Most companies have a lifetime reinstatement clause, allowing the consumer to re-rent a returned item (or similar item) and receive full credit for all previous rental payments made.
RTO is a lease, as opposed to a credit sale, so no interest is charged.
Industry-wide, 75% of all RTO transactions are weekly; the consumer agrees to pay a weekly amount for leasing property. The remaining 25% of agreements are biweekly and monthly. RTO agreements are generally written for a 12, 18, or 24 month term. If the consumer rents the merchandise for the full term, ownership is acquired. Most RTO transactions include an early buyout clause that allows the consumer to purchase the merchandise at any time during the term for 50% of the remaining rental payments.
A consumer may return a rental item at any time without penalty. Most companies have a lifetime reinstatement clause, allowing the consumer to re-rent a returned item (or similar item) and receive full credit for all previous rental payments made.
Subject To
Subject-to is a way of purchasing property when there is an existing lien (i.e., Mortgage, Deed of Trust). It is defined as: "Taking title to property with a lien but not agreeing to be personally responsible for the lien. If the holder who forecloses the lien can take the property but may not collect any money from the owner who took 'subject-to'".
References: 1. www.stopforeclosure.com/glossary.htm 2. marcelpolderman.com/reterms.htm
References: 1. www.stopforeclosure.com/glossary.htm 2. marcelpolderman.com/reterms.htm
Buying Houses
Houses For Sale! Why People wait to buy a home? Not enough down payment money, No perfect credit, No money for closing, Hate red tape. But I want my own home!Open up your mind and know that all things are possible. We are investors our business is to buy fix and sell houses as soon as possible. It is in our best interest to get you in the house that you want and close as soon as possible. If you are a client that has credit issues that can be resolved in the next six months to a year and you would like to buy a house today, we will be willing to lease option a house to you that you want to buy, until you are qualified to close. Home Owner Ship is no longer a dream, it's a matter of action, here at RealVestors.com!
Look, Houses For Sale! Get your credit report and fill out the "Qualify Me" application and submit it for approval. Contact the contact person at the house that you are interested in with your pre- approval letter and you will be in your very own house in a matter of weeks.
Look, Houses For Sale! Get your credit report and fill out the "Qualify Me" application and submit it for approval. Contact the contact person at the house that you are interested in with your pre- approval letter and you will be in your very own house in a matter of weeks.
Fixing Houses
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Selling Houses
Sell My House Without Realtor. We buy houses. The condition of the house or your situation? "It doesn't matter". Submit information About your house to us. We will reply with an offer in 24 hours. If we decide not to buy then get rid of it quickly without having to pay a commission, be a winner just do the following:
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