What is the main feature of a lease-purchase mortgage loan?

A lease-purchase mortgage loan primarily allows a tenant to rent a property with the added feature of having an option to buy the home after a set period. This arrangement benefits both parties, as the tenant can live in the home while having the opportunity to accumulate equity or save for a down payment over time. This type of arrangement is particularly advantageous for buyers who may not be immediately ready to purchase due to financial constraints, as it gives them time to improve their financial situation while also committing to the purchase of the property in the future.

The aspect of providing an option to buy after renting is crucial because it differentiates a lease-purchase from a standard rental agreement. In standard rentals, tenants might not have any vested interest in the property or an assured path to ownership. The lease-purchase effectively combines elements of rental and future ownership, making it an appealing option for those who aspire to buy but need some additional time.