This is how a lease option should work: After securing the go-ahead from a mortgage broker and before moving in, your potential buyer will give you a healthy, nonrefundable deposit to go toward the down payment of the house -- typically, 3 to 5 percent of the purchase price.
The amount of interest that accrues on your loan is determined by a simple daily interest calculation: Your current principal balance Ã The number of days since your last payment Ã Interest rate factor = interest rate Ã· 365.25 (number of days in a year) = Your daily interest rate.
There are many ways to calculate the interest. The most common way is by adding on a percentage of the loan (called the âinterest rateâ). For example, if the interest rate is 10% and the loan is for Â£100, the sum of the interest is Â£10, and the sum we would need to return is Â£100 + Â£10, which gives us Â£110.