Moringa Industries

The contract will specify a rent payment that is higher than a traditional lease would be on a similar property being used as a rental. An example would be a house that could be listed today at $295,000 or rented for $1500 per month. In the lease option the rent could be $2,000 per month with $750 per month applied towards the down payment. The prospective buyer would also supply a down payment; we'll use $5,500 in this case. They may have a three-year option to purchase for $325,000. If the person leasing the house elects not to buy it they would walk away from the money that they have put in.

Rent = $2,000/month
Credit = $750/month
Down Payment = $5,500
36 month lease/option
36 months x $750 = $27,000
Down payment = $ 5,500
Total Credit = $32,500
Purchase Price = $325,000

$32,500 = 10% Down Payment

The advantages for the buyer are that they can accumulate a down payment towards the purchase but are not obligated to buy. If the market has caused home prices to decrease, or if there is another reason why the purchase cannot be completed, the prospective