Lease with option to purchase.

Interesting answers. I wonder if it would be better to co-own? I'll have to post that question.

I'm in agreement with the other posts. Any involvement in a lease to own proposition should be drafted and reviewed by an attorney....for both parties. There are many cons to such a proposition and each party should be fully aware and understand what those are before proceeding.

All responses have been cautions to you against this type arrangement. I agree. Its seldom used for a myriad of reasons. Outcomes usually unfavorable for both parties. But to answer your question from the lenders perspective (being a lender 15 years prior) what can you expect a lender to credit you towards a down payment? That answer is usually an amount over and above fair market rental rates. Example: if the market rent is 2000 and you pay 2000, usually no credit. However if your paying substantially over the rate say 3000 they MAY credit the amount over. Its up to the parties to prove it and the lender to accept it. No guarantees.

Instead consider a typical lease on the home. You may put in the lease you have right of first refusal should seller wish to sell etc. But see if you love location, the home and its issues (they all have them) and then approach the seller with a purchase offer if that's what you want.

Best of Luck.

Opinion - Not advice...In my experience - Typically targeted towards credit and down payment challenged prospects. On the surface, it may seem appealing however Lease with option to purchase "can be" riddled with obstacles, loopholes and double-talk. I would recommend leveling the playing field by consulting an attorney. Quite often, a contract-for-deed type arrangements means that "buyer" is only a renter and never truly receive any benefit until the entire debt is resolved. In other situations, the agreement is a lease with first right of refusal for selling the property and may be coupled with mandatory seller financing (high interest). Often the rent paid is greater than market rate and if you're late or breach agreement, the owner may evict and keep monies accumulated towards down payment. In any case, you have no ownership rights - you are a tenant and during your occupancy as a tenant, any improvements or updates made to the property may belong to the "OWNER" You have no tax benefits.

It would depend on the wording of the contract. We recommend you DO NOT pursue this type of transaction financing UNLESS you have a real estate attorney involved. This is a complex transaction and there are many ways for a consumer (Buyer) to be taken advantage of by the Seller. I find those looking to pursue owner financing are typically not truly financially ready to buy. I would encourage patience. Get your financial house in order so you can pursue a traditional mortgage, often with better terms and interest rates.

Mark McNitt
832-567-4357
www.MarkKnowsHouston.com
Bernstein Realty

This kind of contract is do-able, but complex, filled with risk, and all parties should be soundly real estate savvy and contract sophisticated. Frankly should only be done using a good real estate attorney. In one or three words from a real estate broker, "above our paygrade." BE CAREFUL!! )

Often it's use as away to shift responsibility when it comes to maintenance of the property. Also depending on how the contract is drawn up. If any thing goes wrong in the owners personal life. The property can receive judgements and liens attached to the property. That will create problems for future transaction or sales. Make sure you have a real estate professional to guide you in your decisions.

The amount will depend on the wording of the contract. This type of agreement often ends poorly for the buyer. Be careful.

It all depends on your contract you have signed or are about to sign. Sometimes none goes towards the purchase of the purchase of the house. Make sure you read the contract in its entirety and do not sign something you do not understand. This is a good question to ask whom ever is offering you this type of arangment.