The Growing Popularity of Lease-to-Buy Option- By: Cassiano Travareli
When the foreclosure crisis was traced to the aggressive lending practices in the subprime mortgage industry, underwriting guidelines were immediately tightened. As a result, more and more buyers are experiencing difficulties in getting approved for a mortgage. To get around this, buyers and sellers are entering into a lease-to-buy agreement, which leaves both parties satisfied.
Basically, a lease-to-buy back option allows the interested buyer to lease the property for an agreed period of time. After such time, the seller will then agree to sell the property. During the time when the buyer is essentially a renter, he will try to repair and improve his credit in order to put himself in a good position for home ownership.
In addition to this, the buyer will also be able to determine whether he is ready for the responsibilities that come with home ownership. After the lease expires, he can easily decide whether he still wants to buy the property or not. He can still choose to lease the property once again if he feels that he needs more time.
On the other hand, the seller will enjoy receiving a steady amount of cash in rent money and will look forward to the day when the property will finally be off his hands. As you know, vacant properties cost sellers much in terms of insurance, maintenance and taxes.
The growing popularity of the lease-to-buy option is not even surprising considering the present state of the housing industry. Across the nation, more and more homeowners are losing their homes to foreclosure, adversely affecting the entire industry.
Home prices have been steadily declining in states hit hardest by the foreclosure crisis and there are literally millions of foreclosure homes for sale in the market. And with the recent economic blows, it can be expected that more homeowners will lose their homes to foreclosure by the end of the year.
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Cassiano Travareli has been educated in the finer points of the foreclosures market over 5 years.