Marissa was a 30-something single mother of
2 currently renting in Urbana. Marissa had
always dreamed of owning a house but she
figured that her job as a cashier at the
local supermarket and her low credit score
would never yield enough income to support a
house purchase. She had heard about the
"Lease with Option to Buy" service offered
through Schwaps and gave them a call.
Marissa was currently paying $800 per month
for her 3 bedroom apartment in Urbana.
Schwaps had informed her that she could own
a house for as much, per month, as she was
paying in rent. She was very excited and
surprised by this news and was even more so
when she saw the numbers break-down.
Schwaps told Marissa that they could lease a
property to her with an option to buy.
The Lease would be a 2 year lease on a house
that, in 2006, had a value of $115,000.
Marissa would pay $800 per month while
leasing the house. Schwaps, as a purchase
incentive, would credit Marissa $300 of her
monthly lease payment towards the purchase
of the house if she exercises her option to
buy in 2010. The purchase price of the house
was decided based on a 5% appreciation per
year for two years, or $126,788. For the
lease, Marissa would pay a security deposit
of $1,000. And for the Option Consideration,
Marissa would pay $3,000.
When 2008 arrived, Marissa had a good credit
rating, she was able to qualify for
financing and purchase her first home ever.
The price of the home was $126,788 minus the
$7,200 incentive credit ($300 x 24 months)
which equaled $119,588.
Marissa was very excited to finally own her
own home. And due to 9% average of
appreciation in her neighborhood from 2006
to 2008, she obtained a stellar deal on her
house. Since the base price of the home was
based on 5% appreciation, the value of the
home at the time of sale was actually
$136,632. So upon purchase Melissa, walked
away from closing with $17,043 in equity.
* The story
above is just one example of the many ways
Schwaps may serve your Real Estate Needs |