Can someone clarify this paragraph about Lease Option please?
Hello BP community!
Reading a book on Lease Options now and got stuck on this one example. Please help me understand what it means.
Facts: Seller has a home worth $235,000 and will sell it to you for $225,000 on an 18-month option.
"The seller owes $150,000 on their mortgage and agrees to take $75,000, less closing costs at the time of closing ($225,000 sales price less $150,000 current mortgage balance). This allows you to get the mortgage equity during the option period. The equity from the principal pay down during this option period is estimated at about $200 per month so $3,600 total during the 18 month term." - this is word for word.
What do you guys understand from this paragraph?