Sell your home & carry on living in it????

mouseymousey99

Hello, One of the local estate agents is now adveritsing a sell your home & carry on living in it scheme. What do you think of these schemes?
My worry is we live on benefits & our interest only mortgage is paid by DWP. What happens when the mortgage expires (about 12 years)?
I would hate to have to leave our house.
Thank you

CFC

When your mortage runs out you will have 3 options

1) Remortgage (assuming you can find anyone to lend you the money)
2) Pay off the mortgage capital (if you have the money)
3) Sell the house and pocket the difference between the sale price and the mortgage capital.

cattie

You've really got to think carefully about this as if you were to sell your house & start renting, be it your own or another property, you may lose any means tested benefits you currently receive if there is money left over after the mortgage has been cleared.

Is there any chance of either of you getting back to work in the near future? Only if so then you should then think about changing your mortgage to a repayment if you haven't got an endowment policy or some other way of repaying the the mortgage at the end of the 12yr period.

Also the companies that buy houses to rent them back to you pay a lot less than current market value, they take advantage as these schemes are only really suitable for people in desperate situations.

Morglin

Any property owned (but not the main residence) is counted as income, so if you sold your home, then you would not eligible for means tested benefits.

Eager_Elephant

Assuming that if you sold the house, the purchase price would only cover your mortgage and you have no equity the following will apply:

"You cannot get Housing Benefit if you or your partner used to own the home you are now renting. This rule only applies if you owned it within the past 5 years and have lived there continuously since you owned it. It does not apply if you or your partner would have to have left your home if it was not sold"

So if you can't remortgage and the DWP will not pay your interest only mortgage then the house could be repossessed - so under these circumstances you would be entitled to HB if you were forced to sell to the local estate agent.


As an aside to benefit problems the main issue is that the price they offer you is only 60 or 70% of it's true worth.
If you risk repossession then this may be your only option of still living in your home but then you may be at risk of mortgage shortfall.
Also I am unsure what sort of tenancy agreement they give you. If it is an Assured Shorthold then presumably when the initial 6 or 12 mths are up they could evict you.

HTH

EE