lease purchase mortgage

Definition

A financing instrument that allows a potential homebuyer to lease a property with the option to purchase it later. This type of mortgage is more common when the market is saturated. It gives people with marginal ability to purchase outright a platform to obtain property. The first monthly rent is often structured to match the amount of a traditional mortgage payment plus a small sum as a deposit that can be used as a savings account for a down payment.
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lease purchase lease term