Lease to own homes are the best option if you find it difficult to repay your mortgage payments. The difference between lease option and lease-purchase should be learnt before deciding on an arrangement. A lease-option is a deal where the tenant need not buy the property at the end of the agreement term. On the contrary a lease-purchase deal demands the renter to buy the property at the end of the deal irrespective of whether they have money on hand or not. Before signing an agreement make sure which one you have chosen among the two and then put your signature.

In a lease to own homes first decide the sale price and the rent amount charged by the owner of the property. Ensure that both the amount is negotiated thoroughly before signing the contract, because there is room for bargaining in the deal. Once the price is decided there will be no changes until the end of the contract period. This period of contract can vary anywhere between one year and three years as per the convenience of the buyer and the seller. The price remains the same irrespective of the market conditions.

The renter has to pay an option fee and a rent premium too. The option fee is a fixed amount paid by the renter to the owner of the property. This option fee becomes part of the down payment when the tenant buys the property at the end of the term. In case the renter does not buy the property the option fee will not be returned to the renter. Rent premium is higher than the market value and part of the rent premium goes towards the down payment. The excess amount collected goes towards the down payment of the property.

This option is a welcome alternative to both the tenant and the owner. The owner can get rid of the old house that was languishing in the market for a long duration and at the same time the renter can become proud owner of the property irrespective of his credit scores or employment status. The deal works out fine for the owner even if the buyer is unable to pay the price of the property at the end of the term. The owner keeps all the money if the deal does not materialise. Therefore, it is only the tenant who looses the money and not the owner. So the tenant should be careful before entering into such contracts. Only if you are twice sure of arranging for funds to buy the property should the deal be opted in the first place. Else, it is best to consider the lease option instead of the lease purchase plan.

Every deal has their own advantages and disadvantages, therefore it is vital to weigh both on a scale before considering a deal. Anything may go wrong in between, like unexpected medical expenses, divorce, etc in which case the deal needs to be called off. Therefore, it is best to have a contingency plan ready. Lease to own homes if followed to the contract can work in favour of both the tenant and the owner.