If you’re house hunting or planning to start while still leasing, you might wonder about breaking your lease to buy a home.
You may expect the process to take a while, but sometimes it moves faster than expected. This could leave you facing the decision of breaking your lease. Can you do this, and should you?
Can You Break A Lease To Buy A House? Yes, you can usually break your lease after discussing it with your landlord, but be prepared to pay a penalty fee.
Legally, breaking a lease is justifiable in extreme circumstances like an uninhabitable apartment, military relocation, or domestic violence. However, breaking a lease to buy a house is more complicated and varies by state.
How To Get Out Of A Lease Notify your landlord or property manager if you want to break your lease. Always check your lease agreement’s rules and conditions.
Options to get out of a lease include:
Home Buying Clause: Some leases include a clause allowing early termination if you purchase a new home.
Paying an Early Termination Fee: This usually involves paying 1-2 months' rent plus an additional penalty.
Switching to a Month-to-Month Agreement: This offers more flexibility but may come with higher rent.
Always get any agreement in writing and keep records.
The Pros And Cons Of Breaking A Lease To Buy A House
Pros:
Quick Bid: You can move out immediately if your offer is accepted.
Potential Lower Costs: Near the lease end or with a cooperative landlord, breaking a lease may not be too costly.
Building Equity: Buying a home allows you to build equity.
Cons:
Paying Remaining Rent: You might be asked to pay the remaining months' rent, which can be costly.
Credit Score Impact: Unpaid lease amounts can hurt your credit score.
Rental History Impact: Breaking a lease can affect future rental references.
Alternatives To Breaking Your Lease
Subletting: Rent out your space to someone else, with landlord approval.
Delaying Closing: Ask the seller to postpone the closing date.
The Bottom Line:
Is Breaking Your Lease Worth It? Breaking a lease to buy a home can be feasible, but it has potential financial and credit consequences. Ensure you understand these impacts before making a decision.
Ready to buy your own home? Start with V Nation Corp® today.
Comments