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How Much Credit Does the Buyer Get On A Monthly Payment? #shorts

8 Apr 2024 · 0 min

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0:17

In this short explanatory video, the speaker clarifies how payments work in a lease‑purchase arrangement. When a buyer makes monthly payments to the seller, the seller benefits from the principal paydown that reduces the outstanding balance. Conversely, the buyer does not receive any credit toward the eventual purchase price from those monthly payments; only the down payment contributes toward the purchase amount. The speaker emphasizes that the monthly payment essentially serves the seller’s financing, not the buyer’s equity accumulation.

But a majority of the time, if we're making a payment to a seller on a lease purchase, we are at least getting the benefit of the principal paydown on the monthly payment. If you're asking on the flip side, like how much credit are you giving to the buyer on a monthly payment, then typically it's zero is what you're getting for credit. It's only the purchase— it's only the down payments that count towards the purchase