When you sign a lease option or rent to own agreement you are given a certain period of time to purchase the rent to own home for a set price.
What happens if you are just a few weeks or months away from qualifying for your home loan and the option period expires?
Well, if you have a regular rent to own agreement setup you will simply lose the option to purchase the home and the seller is no longer obligated to sell their home to you.
You will lose all the equity you have built in the home. That includes:
- The option fee
- Rent credits
- Any appreciation.
Knowledge is power!
A well educated rent to own tenant will negotiate that they have the ability to extend the option period. If they are still unable to qualify for a loan at the end of the option period.
MOST importantly, it needs to be stated in the lease and option agreements when they are signed upfront.