Reverse Mortgage

comedy_eyebrows

There was an advert in the News of the World on Sunday. A company are offering reverse mortgages. They are saying that they will give you what your property is worth, rent it back to you or at a later date give you the option to buy it back. Anyone heard of it, and is it the old proverbial barge pole situation?

toonfish

if it's anything like similar shemes I've seen they will actually give you 70-80% of the true market value, just preying on folk who are struggling.

comedy_eyebrows

Thanks Toonfish. Thought there was something fishy about it. Pardon the pun. Cheers.

herbiesjp

SPam reported

jamesd

There's a definite market for people looking to buy property "below market value" and rent it back. One big problem is that they own the property so they can choose to end the tenancy whenever they like. Then there's the question of the price they will ask for when you want to buy it back... they'll give you one, but bet on it being market value (losing you 20% immediately) plus growth since the sale.

It might be a useful approach for people who have major financial trouble. Buyers who are BTL landlords may actually want you as a long-term tenant as a normal part of their business plan.

If you're tempted, ask local estate agents for a local BTL landlord with a good reputation who might be interested in buying the property and having a long-term tenant. This is most likely to leave you in a good position.