How Renters Can Exit Their Apartment Leases to Buy a Home

Making the jump from renting to buying a home is a big step, especially for first-time homebuyers. If you're feeling nervous about your lease contract and worried about legal issues, you're not alone. This guide will walk you through what you need to know about exiting an apartment lease so you can confidently take that first step toward owning your own home.

1. Review Your Lease Agreement

The first step is to carefully read your contract. It will include specific details about what happens if you decide to end your lease early, known as "early termination" clauses. Some common terms to look for include:

• Notice Requirements: Many leases require you to provide written notice a certain number of days before you plan to leave.
• Early Termination Fees: Some leases include a penalty for breaking the contract early. This fee could be a flat amount or based on the remaining rent due.

2. Check Your State’s Laws on Lease Termination

Most states require you to give adequate notice before ending a lease. Check your state’s regulations to understand the minimum notice period and any specific legal protections you might have. Some additional resources can be found here: https://ipropertymanagement.com/laws/breaking-a-lease

3. Talk to Your Landlord or Property Manager

After you understand your lease and any state laws that apply, consider speaking with your landlord or property manager. Explain your plan to buy a home and see if they’re willing to negotiate an early termination with reduced or waived fees. Many property managers may be understanding, especially if demand is high, you provide adequate notice, or you have a good rental history.

4. Be Prepared to Pay an Early Termination Fee

In some cases, you may simply have to pay an early termination fee if there’s no other way to break your lease. While this isn’t ideal, think of it as an investment in securing your own home.

5. The Timing of Your First Mortgage Payment May Offset Early Termination Fees

When you pay rent, you pay ahead of time. For example, if you pay rent on March 1st, it covers all of March. But with a mortgage, you pay in arrears for the previous month. So, your March mortgage payment is due on April 1st.

When you buy a home, the first month’s interest is included in the closing costs. Since LGI Homes covers those costs, you won’t have a mortgage payment in your first month, helping the transition to homeownership.

For example, if you close on your home on July 1st, the July interest is part of the closing costs. Your first mortgage payment (for August) won’t be due until September 1st. If your last rent payment was on June 1^st (paying up front for June), you’d have gone over 90 days without any housing payments. This extra time can help you pay for early lease termination fees.

 

Transitioning from renting to owning is exciting but can be challenging, especially when navigating the lease exit process. By understanding your lease, planning ahead, and communicating openly with your landlord and LGI Homes new home sales consultant, you can make the transition smoother. Good luck with your homebuying journey—you’re one step closer to making your dream of homeownership a reality!