Pre-payment penalty / Lease purchase - Posted by Donna
Posted by Donna on March 10, 2000 at 15:05:21:
Hopefully someone will know some good answers to my questions:
My husband and I were first time buyers when we purchased our house in 1997. We bought the house through owner-terms with this “lady” (I hesitate to call her a lady), and she put a $10,000 pre-payment penalty in our contract. The payments were set up for 5 years, and if we sold the house or paid it off within that 5 years we are subject to the $10,000 pre-payment penalty.
The only way we can get out of that situation is maybe a lease purchase. We have 32 months left before the balloon payment is due, therefore, the lease purchase period would be for that 32 months.
When we bought the house, it was literally eaten up by termites, the foundation was sinking into the ground, we had to renovate EVERYTHING before it was livable. Now it is a beautiful place – probably one of the nicest places in the neighborhood. We put blood, sweat and tears into the place (no lie), and we want to make sure if we do a lease purchase for 32 months that 1.) the people WILL buy it at the end of the lease and 2.) we’re not stuck with a house that someone neglected or misused – we all know that renters and leasers do not always take care of a property.
What would be a fair amount to ask someone to put down on the place? The house has been appraised at $165,000. We have about $77,000 in debts that have to be paid now… the balance of $88,000 can be put into lease payments for the remaining 32 months and that $88,000 can be refinanced by the lease-purchaser at that time. I know if someone has $77,000 tied into a house from the very beginning, they will take care of it.
Anyone have any ideas on this situation?