Rent to own?

jen_br

Hi bit of a background here: I am looking to get on the property ladder but im not from the uk have lived here for 7 yrs my husband has owned homes in the past but we have rented for 4 years now.

The house we are in the owners are in OZ, they have an interest only mortgage and are always up for offers.

I was just wondering if you can get a rent to own or similar with a bank.. the reason being is the deposit is a bit of an issue an we don't have 100% clean criedt (who does now a days! -- ok i know some do) but its not that bad criedt either.

anyway the real reason id be looking at rent to own is its less then a mortgage payment per say and youdon't need as MUCh as a dep but wasn't sure if it was just for new builds..

please advise.

property.advert

So you have no deposit ? I guess no mortgage then. Even if they do you a deal on below market price, the bank will only look at that price and not the market value as they assume the sale price is the market value.

You will be able to prove affordability as you have been paying the rent but your poor credit record will just further hamper you and push any available deal to a much higher interest rate and higher deposit.

Fiddlestick

jen_br wrote: »

I was just wondering if you can get a rent to own or similar with a bank.. the reason being is the deposit is a bit of an issue an we don't have 100% clean criedt (who does now a days! -- ok i know some do) but its not that bad criedt either.

anyway the real reason id be looking at rent to own is its less then a mortgage payment per say and youdon't need as MUCh as a dep but wasn't sure if it was just for new builds..

What's a "rent to own"?

I'm not familiar with that concept, but the long and short of it is that in this day and age you are very unlikely to obtain a mortgage without a decent deposit.

Long gone are the days of 100% mortgages.

G_M

Fiddlestick wrote: »

What's a "rent to own"?

I'm not familiar with that concept, but the long and short of it is that in this day and age you are very unlikely to obtain a mortgage without a decent deposit.

Long gone are the days of 100% mortgages.

Rent to own is where you are tied to a property by part-ownership and forego the flexibility of renting. Yet you are a tenant.

Although you have a landlord, you are responsible for repairs etc.

You can never sell, because you only part-own.

But you get that warm feeling that comes from knowing that the kitchen and living room are both entirely yours (well, apart from the mortgage lender).

jen_br

G_M wrote: »

Rent to own is where you are tied to a property by part-ownership and forego the flexibility of renting. Yet you are a tenant.

Although you have a landlord, you are responsible for repairs etc.

You can never sell, because you only part-own.

But you get that warm feeling that comes from knowing that the kitchen and living room are both entirely yours (well, apart from the mortgage lender).

Sorry I think its called buy to let in this country... and you do end up owning it..

I have about 15k for a deposit which isn't much.

Fiddlestick

jen_br wrote: »

Sorry I think its called buy to let in this country... and you do end up owning it..

Nah, a Buy to let is where you purchase a property specifically with the aim of renting it out to tennants - you don't actually live there.

I think you might be referring to part ownership/shared equity, where you can buy the property in chunks of (for example) 25% and pay the housing association rent on the remaining chunks?

BobQ

www.renttobuy.co.uk/index.php

Not sure if this is a sensible proposition but this site appears to be what the OP is looking for. Whether you could enter a legal agreement with the current owner to do this I have no idea.

jamesd

jen_br wrote: »

Sorry I think its called buy to let in this country

No, it isn't. The two things are both available here and are different.

"Rent to buy" or "rent to own" is offered by developers of new properties to give people a chance to move in and see if they like the place, knowing that many will go on to buy.

You might also look at "shared ownership". This is where you start out buying say 25% of the property. That reduces your deposit requirement so can get you into the place. You pay rent for the remaining 75% or whatever it is. To buy the rest you can a new valuation and pay the current market price for that piece. If prices rise this can make it very expensive to buy the rest but for now it may be quite a good option for at least a few years. It can be a very good option for those who don't have a big enough deposit but who do have good incomes that will let them buy the rest over a few years.

You need to watch your credit score very carefully. Even minor blemishes can be devastating to your ability to get good mortgage deals.

jen_br

jamesd wrote: »

No, it isn't. The two things are both available here and are different.

"Rent to buy" or "rent to own" is offered by developers of new properties to give people a chance to move in and see if they like the place, knowing that many will go on to buy.

You might also look at "shared ownership". This is where you start out buying say 25% of the property. That reduces your deposit requirement so can get you into the place. You pay rent for the remaining 75% or whatever it is. To buy the rest you can a new valuation and pay the current market price for that piece. If prices rise this can make it very expensive to buy the rest but for now it may be quite a good option for at least a few years. It can be a very good option for those who don't have a big enough deposit but who do have good incomes that will let them buy the rest over a few years.

You need to watch your credit score very carefully. Even minor blemishes can be devastating to your ability to get good mortgage deals.

THANK YOU! Yes sorry its shared equity I am looking for. Where im from a lot of people call it rent to buy.

jamesd

Then that looks like a good plan for you.

jen_br

So my question is can you get this from a bank or only from builders?