A lease purchase mortgage is a financing option that allows potential home buyers to lease a property with the option to buy. Often constructed so the monthly rent payment covers the owners first mortgage payment, plus an additional amount as a savings deposit to accumulate cash for a down payment. Sellers may agree to a lease purchase option if the housing market is saturated and they are having difficulty selling the property. Tenant/Buyer Features & Benefits: If you are in the market to buy a home, you are probably aware of the advantages home ownership provides (tax shelter, appreciation, security, etc). If you are actively seeking homes for sale on a Lease to Purchase agreement, you are either

1. a very smart renter,
2. a very smart real estate investor,
3. not ready to make a commitment,
4. cannot yet purchase a home through conventional means or
5. any combination of the aforementioned.

The Lease to Purchase contract provides you with many features and benefits, but perhaps the most powerful one is the rate at which you accumulate equity. Compare any lender's loan amortization schedule to that of a Lease to Purchase contract and you'll quickly see that the Lease to Purchase contract wins hands-down -- every time. Moreover, the buying power of a Lease to Purchase contract can quickly and easily land you a home that you could only dream of buying the conventional way.

Benefits of Lease Purchase for the Landlord/Seller: If you don't need all your equity right now, the best way to get your full asking price and a higher than average monthly rent for your home is to sell it on a Lease Purchase. Since you are assisting the tenant/buyer with a plan for home ownership, they tend to be willing to pay a higher sales price and higher than average rent to get started on that path. Help your Tenant/buyers understand the concept of trading price for time and value. When you offer a Lease Purchase on your home, you receive a non-refundable option deposit. You determine the amount of the deposit you require. You will receive the majority of your profits at closing, when and if the tenant/buyer exercises his option to buy. In the event the tenant/buyer defaults or allows the option to expire, you will retain the non refundable option deposit. You are then free to begin the process again.