With a Lease Option, you as a buyer can control a property without actually owning it yet. The "Lease" part of the agreement gives you the right to occupy the property and the "Option" part of the agreement gives you the right to buy. As part of the lease, a percentage of the rent payment is credited towards the purchase price. This means that you are occupying the property, the seller cannot resell it to someone else, and a portion of your monthly payment is going towards what is owed on your option to buy.

Sellers will do a lease option for a couple of reasons. Sellers will do a lease option, mainly, for debt relief. When you "Lease Option" the property for the amount owed on the mortgage, you are giving the seller the debt relief they need. You are going take over the monthly payments, living in the house and maintaining it until you actually close the purchase of the house. Mean while, the seller now gets enough money from you to pay for their mortgage, taxes and insurance, and they no longer have to worry about maintaining the property.

Also, some sellers may need to improve their "debt to income" ratio when buying a new home... A debt-burdened home-owner looking to buy new property has a slim chance of doing so. The reason being that mortgagees always examine your debt-to-income-ratio to determine how much you can pay towards the mortgage you take out for the new property. Now, you as a buyer, "Lease Option" the house from the seller. The lease payment the seller receives is considered to be income (for tax and credit score purposes) and this income offsets the debt of the monthly payment on the old home. Therefore, you are helping to correct the seller's debt ratio problem.

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