Can we get a mortgage with an LOA in progress?

Leasing with an option to buy is a contract assimilated to consumer credit, taking into account the rent is therefore identical to that of a car loan. Borrowing is therefore not so simple when you have a current LOA.

LOA: principle and impact on debt

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Leasing with purchase option is a contract which makes it possible to rent a car and acquire it at the end of the rental period, a purchase option is defined at the outset and allows the motorist to become vehicle owner if desired.

Simply, the LOA is financed by consumer credit, this means that it will impact the debt capacity of the subscriber and if the latter wishes to embark on a real estate project, he will eventually encounter some difficulties in obtaining its financing.

The banker will, therefore, study the plaintiff’s situation and take into account his rent, you should know that we can go into debt up to 33% of his income, beyond that, the bank will not accept to release the funds for the mortgage applicant.

If the LOA’s rent is too high, then financing cannot be set up because the applicant’s repayment capacity will not be sufficient, which completely calls into question the real estate purchase project.

Solutions for obtaining a mortgage

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If your LOA does not allow you to take out a mortgage, you must then consider several solutions to end the rental contract with an option to buy:

  • Redeem vehicle / contract
  • Transfer LOA to another person

Important: it is not possible to terminate an LOA contract since it is assimilated to a consumer credit contract, therefore, it is necessary to find other solutions to disengage.

Have the vehicle / LOA contract redeemed

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The lease with purchase option plans from the 13th month a purchase option for each month following the far end of the contract and the final option. Therefore, it is possible to purchase the vehicle from the 13th month.

Either the motorist can buy the vehicle himself, by his own means or through a credit buyout for example (he becomes the owner automatically and the contract ends), or he offers to another motorist to buy back (the buyer pays the amount of the purchase option to the lessor and automatically becomes the owner of the car).

Transfer the LOA contract to a third party

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One of the least expensive solutions is to use the principle of the transfer of leasing, it is to find an interested person to take over the current contract and the vehicle.

We simply change the tenant, a takeover file must be submitted to the lessor, who will carry out a credit study.

On the cost side, the buyer will simply have to pay the transfer and update fees for the registration card. It is advisable to use a leasing transfer platform to quickly find an interested buyer.

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