Lease with an Option to Purchase
A lease with an option to purchase is a contract between two parties: the tenant (also called the lessee), who will occupy a Mobile Home, house or apartment, and the landlord (lessor), who owns the property.
The landlord (seller) will set in the terms that tenant (buyer) pays a fixed payment amount (No Interest) to the seller. All or only a portion of the payment may be applied to the total value of the property. This will be negotiated between the seller and buyer. At the end of the contract, (Typically 3 years) the tenant has the option to purchase the property. At which time financing would need to be arranged for any amount of principle still owed on the property. Depending on the Purchase Price and Down Payment, a mobile home lease option (3 year term) with Mocksville Mobile Homes, has sometimes satisfied the entire purchase price. You are really renting the property until the end of the term, at which time you have the option to purchase. Of course this does not mean you have to buy the property, but if you decide not to, you will forfeit any moneys paid to the seller. It can be agreed upon that an excess amount be payed in the monthly payment (and saved) in the form of an escrow account, at the end of the term this amount would be applied towards a down payment should further financing be needed. This works like a savings plan.
Lease options are often used by people with a poor credit history, who would not qualify for a typical mortgage or loan. The lease option may also require less money up front, while a mortgage might require a substantial down payment from the tenant. This is a good way for people with bad credit or no credit at all to have the opportunity to purchase a mobile home, who might otherwise never be able to do so.