Lease Options & Lease Purchases Offer Financing Alternatives

When mortgage credit tightens, buyers and sellers consider alternative financing options such as lease options or lease purchases.

The two are not identical, but are synonymous with rent-to-own. Both involve owner financing, so the buyer is not obligated to obtain financing from a conventional lender, at least for the term of the agreement. Another under-utilized financing term is option. But options are separate from a lease option and a lease purchase. Sound confusing?

Options, lease options and lease purchases are nothing new. They are financing instruments that have been used for decades. In fact, I had an option to buy an oceanfront home in Ventura, CA, in 1980. But the winter storm of 1981 crumbled its sea wall and sent that home sliding into the water. I stood in the street and watched the home next door get squashed flat by the pounding waves. The wind and rain scattered my neighbor's valuables and furniture down the block. My cat and I were lucky to escape from that disaster. But in case you're wondering, no, I didn't exercise the option to buy that house . . . read more about lease options and lease purchases.

More Articles by Elizabeth Weintraub, click below:

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• Top Home Buying Tips

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