Prevent Foreclosure With An Option That Many Do Not Know: A Lease Purchase Agreement

Looking down the barrel of a foreclosure, if you are among one of the many millions of homeowners confronting this same issue, there might be a creative technique to save your home. Save your home and salvage your equity so that you can fight again. The last thing that you would like to do is give your home back to the lender.

If your financial burden has left you in a position whereby you cannot pay your mortgage payment, whatever the reason for this might be, then you cannot afford to live in your home.  Property foreclosures are a growing dilemma for many homeowners in the United States these days; foreclosures are at a very high rate. 

Some lenders out there haven't been playing fair, and some even to the point of unethical practices.  These unethical practices are a primary reason that foreclosures are at an all time high and not estimated to slow down, from what the majority of experts have said. 

On the bright side of things, you might have an option that might allow you to keep your home, even though the process of a foreclosure is already under way.  Something that has been around for many years, and you could possibly use to save your home and equity.  You may need to wait a year or two in an attempt to cash out the equity on the property, but it is better than the alternative. 

This option is known as a Lease Purchase Agreement.  Basically, you find a tenant to lease your home from you, with an option to purchase the home at the end to the agreed period or time; typically 12 to 24 months.  You set a price for them to buy the house when the agreement is signed; this will allow you to set the price so that you can save the equity and by some time to recover.  With a tenant that has the alternative to buy your home you might be capable of: 

1) First and foremost is the avoidance of a foreclosure 

2) Since renters are paying less today because of the high foreclosure rates, this might be a way to grow the monthly rent, due in light of the purchase agreement 

3) A one-time payment, up-front as a non-refundable deposit, this is usually 1% - 3% of the sales price.  The best part of this is that even if they choose not to buy your home, you still get to keep the money 

4) Quickly get a buyer for your property, most times quicker than attempting to sell your home in the traditional way 

5) Someone else is going to be paying the mortgage payment, and potentially a few hundred dollars a month more 

Lease Purchase Agreements usually work well in any real estate market; these agreements referred to as a "lease alternative" also.  This is a very valuable strategy to keep in mind, especially throughout market that in a distress. 

While there may be many other reasons to take advantage of a lease alternative, they are defiantly an excellent way to prevent foreclosure, and salvage your home from the bank.  In a foreclosure, your credit will be destroyed for years to come, and the added financial repercussions can take a tool on your personal life.