A rent credit is typically an amount of money credited from the monthly rental payment towards the purchase price of the property.

In certain circumstances, the rent credit may be applied towards the down payment. However, applying a rent credit to the down payment will depend upon the guidelines of your mortgage lender.

Why Receive A Rent Credit – You want to receive a rent credit for a number of reasons. It can act to lower the purchase price, possibly be applied towards the down payment, but more importantly, a rent credit can be a very powerful negotiating tool. How? Let's see.

You can use the rent credit as a guarantee that you'll pay the rent on time. By offering to take no rent credit if your payment is late, you show your good intentions to the seller.

By receiving a generous rent credit, you can afford to give the seller his/ her asking price or possibly even pay a bit above market. Why, when applied to the purchase price, the rent credit can have a substantial effect on the price.

·         When negotiating with the seller, you can be non-adversarial by offering the asking price, provided he is willing to give you a rent credit.
 

·         How about monthly payments. Might you be willing to pay a bit more each month if a portion of that was to be credited back to you.

Again, you're demonstrating your good intentions to the seller.
 

·         In effect, your saying,

"Hey, I really want your house and I'm willing to pay a bit more for it".

·         Don't you think an offer such as this will go a long way towards showing you're serious about the property.
 

·         Keep in mind, your goal is to find a home that you can acquire through the use of a lease purchase.

To that end, anything you can do to demonstrate that you are a serious individual makes the process go more smoothly.