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Sell Your House – Then Rent it Back

In times of economic hardship sale-and-rent back schemes offer overstretched homeowners a way out of financial difficulty by giving them the chance to sell their home, then rent it back.

Why would I sell my house, then rent it back?

Selling your house for less than its market value may sound like you’re losing money, but if you are facing mounting debt and mortgage arrears, a long drawn out sales process through an estate agent could cost you more money in fees and time. Similarly remortaging or changing your mortgage payments may cost you more in the long run when you consider the interest that will be charged. If you are facing repossession selling your home quickly for cash is a way of avoiding this and clearing your debt. Deciding to rent it back is then a convenient way to continue your life as normal, avoiding the hassle of moving and not having to say goodbye to your house.

What happens if I decide to sell-and-rent-back my house?

If you decide that selling your house is the best option for you, you can quickly and easily find a buyer that will buy your home for cash at around 70% of its market value. If you are happy with the offer that they make the sale can take place quickly and hassle-free with most firms covering the legal fees and costs associated with selling. The cash you receive can then be used to settle your mortgage and other outstanding debts. Once sold, you get to stay in your house renting at a pre-agreed rate. This could be a long-term solution, it could be a short-term arrangement to avoid repossession while you look for property elsewhere or some firms even offer the chance to buy back your home at a later date. Whatever you decide the process is a fast and discrete way to solve your money problems, pay off your mortgage arrears and then continue with your life.

So what’s the catch with sale-and-rent?

It does sound a little too good to be true, and of course there are disadvantages of deciding to sell and rent. Firstly you will get less for your house than it is worth on the property market. Secondly some firms are more concerned with their profit margin than your well-being, some tenants have found themselves evicted from their home after just one year. Many schemes will only give assured shorthold tenancy agreements, giving you little long term protection from eviction. Government regulation is trying to stop this happening but it reiterates the importance of choosing a reputable sale-and-rent company. Luckily thanks to the Internet there are lots of quick-sell companies available so you can quickly compare quotes and easily research the companies to check that they are approved by the FSA.

If your house is about to be repossessed the worst thing that you can do is ignore the situation. Remember that you do have other options, trying to sell your home on the open market or speaking to your mortgage lender to try an interest-only loan. However if you’re looking for a solution to quickly clear your debt then you should seriously consider a sale-and-rent scheme, which would allow you to pay off your mortgage arrears but keep the home that you love.

(c) Copyright - Kieron Bolton. All rights reserved worldwide.