What Does Lease-to-Own Mean?
Lease-to-Own is a contract that is signed between You and the Seller for an agreed price, length of time, (usually between 1 and 3 years), although we have seen contracts for a longer period of time. You pay a down payment of usually $5,000 through $20,000. You don’t have to qualify for a mortgage from the bank until the end of the contract because the Seller leaves his/her mortgage on the home. Part of your rent goes towards that mortgage. You also pay a monthly amount of usually between $100 and $300 towards a down payment fund. This fund builds over the life of the contract to add to the down payment. At the end of the term you find your own bank financing and pay the Seller out. The Seller cannot change or get out of this contract during the term of the contract. If you wish, you can sell the home at any time during the contract and pay the Seller out or sell the contract to recoup your down payment. For all intent and purposes, this becomes your home.
