It is no secret that it’s a great time to be a buyer in our country right now. There are people looking to sell their homes and because of the economic situation, property prices are leaning towards the ideal. Real estate has become much more affordable than it was just a few years ago. Not only that, there are a couple of tools that are available in the market that you can take advantage of to make your purchase(s) more affordable and protect against any future inflation. Here’s a closer look at some of them to help you better understand the different things that are happening in the market right now.
What is Leasing?
Leasing is when you rent a property with the intention to buy it at the end of the lease term. The payments in this case are the payments that you make toward the principle. In doing so you actually live in the house that you have rented but in the end you buy it. Basically it is a short, defined time frame where you live in the home before you own it.
Who Can Qualify For a Leasing Option?
If you are looking to buy a home but can’t get financing for it, leasing could be the perfect alternative. There are a lot of reasons why people are not qualified to take out loans:
The buyer could be in a bad credit situation or he could be facing a medical predicament. A potential buyer could also be going through a messy divorce and could be looking for other options. Relocation and/or loss of job are additional concerns that often point to the inability of one to get financing on a property.
REAL ESTATE CONCERNS
Given the plethora of short sales or foreclosures, clearly there are many cases where credit scoring may prevent people from getting viable loans. Buyers could also be trying to sell their current homes, but are unable to do so. One option is that they may choose to ward off the time between selling and buying a home with a leasing option.
How Does a Lease Option Work?
A leasing option works like any other regular bank qualification process, but with fewer rules. The relevant parties meet to decide if the option is viable for them. They look at the potential home, the credit choices that the buyer has at hand plus how much money the buyer has and then they determine a value that defines the kind of property they can afford. This number provides a benchmark for the kind of leasing options that can be offered to the buyer.
All these answers when combined provide an accurate timeline as to the conditions when a buyer would qualify for a leasing option. Unlike a bank loan where the wait to qualify can be indefinite, a leasing option provides a clear understanding of when the buyer would qualify for the lease.
Are Leasing Options Successful?
The key to a successful leasing alternative is the solid planning to support it behind the scenes. If you move forward without a plan the success rate could be much lower than your expectation but by incorporating simple planning into the whole process you can see up to a 70% higher success rate.
Things to Look Out for When Opting for a Lease
Although a lease may be the next best thing to a second mortgage, there are a few things that you may need to keep in mind before you move ahead with it. Always research the option before you move ahead with it. Also, partnering with a reputable broker and complying with all real estate and legal requirements is essential to fostering a successful deal.
So if you have found the perfect property and are anxious to sign on the dotted line but have to wait due to a credit crunch, a personal situation or the looming economic downturn, going for a leasing option might be the perfect solution!