It seems to me that people get caught up in looking for a lease purchase because they think that it’s somehow better than renting…. in most cases, and this is just my opinion, it’s NOT. Maybe it makes them “feel” better than renting?
- Myth Buster 1…..The truth is that if you don’t clean up your credit so you can get a mortgage your wonderful Lease Purchase ends up being aregular old rental and if you don’t pay the rent, you get regular old evicted.
- Myth Buster 2….. your rent CAN NOT get applied 100% to the purchase price because the lender that you use to get a mortgage to buy the house is only going to let the seller credit you amounts that you pay over and above the fair market rent for the property, as determined by their appraiser at the time of the purchase.
- Myth Buster 3…..it makes more common sense to find an affordable rental in a good location with a Landlord who wants to RENT long term(and not pressure you to buy) and then you can take your time to fix your mortgage qualifying problem(s). THEN once you can get a mortgage there are LOTS of houses to choose from and you won’t be limited to only lease purchase homes.
The other problem I see in the market today is sellers who can’t sell thier property, decide to rent or lease purchase without knowing all the responsibilities of being a landlord. It’s not easy being a landlord and most home sellers don’t know what they don’t know….this creates all kinds of tenant headaches and potential disputes…. maybe I’ll cover that in the next blog article 🙂 In the mean time, see below my current list of affordable rental homes in South Jersey that might be a good alternative to a lease purchase.
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