Q. My credit rating is poor; will I still be able to apply?
A. Yes. Having a poor credit rating or no credit at all or if you are new to Northern Ireland and working, still means you are eligible to apply. While you are living in the property with the Option to buy, you also get the chance to establish or repair your credit file, positioning yourself as a more attractive proposition to lenders when you are looking for finance to complete your purchase during any time within or at the end of the option time period.
Q. What happens if my circumstances change or I change my mind and don't want to buy the property?
A. You are not under any obligation to buy the property even though you have signed an Option Agreement to do so. However, the initial Option Sum paid at the beginning of the Option Period together with the additional monthly Option Premiums paid towards the purchase deposit, are non-refundable.
Q. If, when I am ready to buy my property, I find it has increased in value; do I get to keep the increase?
A. Yes, any increase above the agreed option price is automatically transferred to yourself upon completion of the option.
Q. May I carry out improvement works to the property?
A. As you are in the process of buying the property, you may treat the property as your home and tailor your home to your own specification, we would ask that before you undertake any improvement works of a structural nature to the property (including extensions, conservatories, attic conversions and removing walls) that you obtain written permission in advance of carrying out the work, as there may be legal and/or structural issues reQuiring clarification and consents in writing. As you are in the process of buying the property, you will be responsible for all maintenance, repairs and damages that may occur.
Q. What if I can't pay the rent or have missed some rent payments?
A. It is an extremely important and essential part of the option agreement to ensuring that your monthly rent and monthly Option Premiums are paid on time, every time. Not only to comply with the terms of your Option Agreement with us, but to also show a future mortgage lender, a credible payment and track record, in order to Qualify for a mortgage with a clean credit history.
The Option to buy can only be exercised provided you have made all your payments in a timely and efficient manner.
In the unlikely event that you are in breach of your, you will be required to clear any arrears and rectify the situation as soon as possible.
Breaching the terms of the agreement may lead to cancellation of the option agreement, loss of all deposit monies and premiums paid eviction from the property, and a claim for any damages and costs.
Q. When can I move in?
A. You can collect the keys and move into your new home as soon as the:
- We have an up to date copy of your credit file and we have processed and approved your application
- The Lease Option Agreement has been signed and approved by solicitors
- We have received all monies in cleared funds.
FAQ's
Q. What is a Lease Option?
A. 'Options' have been in existence for centuries and have been, to date, typically used by developers to purchase commercial property or land and are now rapidly becoming a new approach for residential property owners to sell and for individuals to purchase a property in an extremely flexible manner, without having to immediately Qualify for conventional mortgage finance or put down a large deposit.
A Lease Option is an extension of an options agreement and combines an Option to Purchase (known as the Option Agreement) and the benefits of a normal rental lease (known as an Assured Short hold Tenancy Agreement) . Therefore, in reality, the Lease Option is actually two concepts, using two separate written agreements that combine together as a Lease Option.
A Lease Option is a written LEGAL agreement, whereby a property owner can grant an Option to a buyer which is an exclusive and irrevocable right to lease and purchase the property within a certain period of time, known as the Option Period, at a price fixed from the outset.
Q. Are Lease Options legal?
A. Yes, Lease Options are perfectly legal and solicitors will still be involved for both sides, as in a traditional property purchase. If you reQuire a solicitor who is experienced in Lease Options, then we will be able to suggest one for you.
Q. Who are the Tenant/Buyers?
A. The Tenant/Buyers are the people who will live in the property under the Tenancy Agreement and who have the right to purchase the property under the Option Agreement. You are the tenant buyer.
Q. How do I build up my deposit towards the purchase price?
A. You will pay us an initial Option sum at the time of signing the Option Agreement, prior to you moving into your new home, (normally 5% of the agreed purchase price), together with the Option Premium paid every month. Both these sums are non-refundable and these monies are credited towards your purchase deposit where they will be deducted from the final purchase price of the property at completion, so less money will be due when the property is bought.
Q. Apart from the initial Option Sum and monthly Option Premium, what other costs will I have to pay you before I move in?
A. As in a traditional house purchase transaction there will be solicitor's fees payable by you estimated in the region of £500 plus VAT. You will also need to 1 months rent in advance.
Q. Will the rent go up during the rental period?
A. No
Q. What are the benefits for me as a Tenant/buyer?
- You move in without a mortgage
- You pay a much smaller deposit than required by a bank
- Your purchase price and time period are fixed from day one
- Your option to purchase can be exercised at any time within the agreed time period
- You can benefit from any increase in property value
- You enjoy all the benefits of home ownership from day one
- You own the property outright upon exercising your option to purchase
- You can move in, within a matter of weeks or earlier if required
- Your solicitor still needs to be involved, just like a traditional property purchase
- You have no obligation to buy if your circumstances change
- You are given the time to establish or repair your credit worthiness with lenders, over the option period.
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