Lease options - how do credits to buyer work? - Posted by Joel David
Posted by Joel David on June 13, 2006 at 11:22:57:
I am also looking at selling a condo via a lease option. However, I am confused about how a financing bank for the tenant buyer will look at the credits.
So first of all, the T-B gives me option consideration and then the monthly rent credit - this I get. However, when the T-B then goes to exercise his option to buy it, what does the bank look at as his down payment and LTV? They do not give any additional “credit” for a difference between the option price and the current FMV price when the option is exercised do they?
If the TB has the $$ for the option consideration anyhow, what is the major benefit of a lease option for a tenant buyer?