Lease Option Concept Type Question - Posted by Erskine

Posted by Erskine on December 31, 1999 at 18:35:30:

I am having problems with the concept behind rent credits, that is, how to permit some credit but not too much so as to create a problem with equitable interest by T/B’s. In those situations where the T/B is NOT allowed any rent credit, unable to understand how he is any better off after the experience than before moving into the house unless appreciation is allowed. His actions mirror those of a renter although upfront monies indicate otherwise. How would a mortgage company look at this set of circumstances in terms of funding a mortgage?

What about a sale situation where the rent credits amount to, say, $1,200 ($100 per month credit)toward a home costing $125,000, with the option consideration of $6,250.00
thrown in (5% of price) for a total of $7,450.00. The usual 20% down equals $25,000.00 I don’t understand how this would work with other factors being considered such the amount of rent paid over the fair market rent for the area where the home is located.

You give too much credit, equitable problems, not enough, problems with lenders?