buy your house full market value

exasperated_2

I believe the way that scheme works is the company/bank buys the house from you, and then pays you to live in it on a monthly basis (a monthly payment of the agreed price). It is a way for OAPs who own their home & don't want to move to take advantage of the (often very large) equity in their home. When they die, if there is any value left it goes to heirs, otherwise the house belongs to the company/bank. It is to their advantage to do this because the resale value of the house is generally very good.

bobstheboy

I deliberately gave my wifes age to avoid posters recommending equity release schemes. To be considered for such a scheme you both have to be at least 60.

As for leaving everything to a charity, whilst not adverse to leaving something, I am not leaving everything.

Bob

ehs_3

bobstheboy wrote: »

I can understand why someone (me) would want to sell and rent back.

We have no immediate family, I am retired, my wife is not in the best of health and relatively young (49) so we have no one we want to leave the house too. My only concern is that I want to stay in my house and there are no guarantees of tenure.

Bob

Hi Bob

Unfortunately it is very unlikely that any quick sale or rent back company can give you a 100% guarantee of tenure. Many will be very happy for you to stay and rent the house forever, but it would be impossible for most to 100% guarantee it.

I have heard however that there is the odd large insurance company who are potentially offering guaranteed tenure and getting involved in this area. I can't remember who it is though (I seem to remember Norwich Union being mentioned to me once). Because of the type of company that they are they may have the ability to offer this kind of thing. I have also heard of this company www.sellyourhomeandstayinit.co.uk. However I have no experience of them and cannot say at all how good or bad their offer is. This is not a recommendation, so please anyone check out what they offer very thoroughly.

Regarding suffolkb's post, yes anyone should be extremely wary of paying for a valuation. I know there is a large national company which advertises on daytime TV which does this. You pay up front for a valuation and then they make an extremely low offer. I should stress this is not the way the majority of quick sale companies operate, but unfortunately some of the big names do this, so watch out.

Dithering Dad. There are a few cases where what a rent back company can offer in terms of monthly rent is a lot less than the vendor was previously paying. For example a vendor could be making mortgage payments of £1300 per month on a relatively high rate of interest (e.g. 8.5%). Because of various difficulties (e.g. loss of income, job, ill health), the vendor realistically may only be afford £800 per month. However the vendor has 5 months of arrears, lots of other credit problems, and it is near impossible for them to remortgage. However if the market rent for the property is around £800 then there is no reason why a rent back company cannot offer this as a rent.

seatzie

This would be interesting if it is possible - if I can sort of hijack the thread, for instance, current market value of my house £350,000, say I sold half of it for £130,000, I only have a mortgage of £110,000, so I could pay it off, live in the house, and allow half of it to accumulate in value, hopefully for many years to be left to my son (wife and I in our thirties, DS is almost 2), or am I just dreaming. Don't mean to hijack the thread, but as with the OP if there is a scheme which doesn't require you to be over 60 it would be very interesting!

Dithering_Dad

ehs wrote: »

Dithering Dad. There are a few cases where what a rent back company can offer in terms of monthly rent is a lot less than the vendor was previously paying. For example a vendor could be making mortgage payments of £1300 per month on a relatively high rate of interest (e.g. 8.5%). Because of various difficulties (e.g. loss of income, job, ill health), the vendor realistically may only be afford £800 per month. However the vendor has 5 months of arrears, lots of other credit problems, and it is near impossible for them to remortgage. However if the market rent for the property is around £800 then there is no reason why a rent back company cannot offer this as a rent.

I can see what you're saying, but if the vendor has overstretched himself financially and has to sell his home to finance the debt, then surely he'd be better off getting the best price for his home on the open market and then renting elsewhere at a much lower rate?

If it was me, and I had effectively had my house reposessed due to debt (and probably gone through a lot of stress in the meantime) I think I'd be glad to get out of the blimming place!!

lisyloo

But seatzie - you have to pay rent on the half you sold for the rest of your life.
Long term a mortgage is cheaper that paying rent forever.

lisyloo

then surely he'd be better off getting the best price for his home on the open market and then renting elsewhere at a much lower rate?

You are right in a financial sense.

This is meant to appeal to people who want to stay in their own "home".
Many people personalise their own homes and in particular it would appeal to people who had installed expensive equipment for their personal need like a stair lift.

going2die_rich

bobstheboy wrote: »

I can understand why someone (me) would want to sell and rent back.

We have no immediate family, I am retired, my wife is not in the best of health and relatively young (49) so we have no one we want to leave the house too. My only concern is that I want to stay in my house and there are no guarantees of tenure.

Bob

A lot of banks offer equity releases in your home. Whereby you live in it and get a lump sum so once you both die the bank gets the house. Worth looking in to, but ensure it's a reputable bank, don't go to some unknown company.

Like I said, lots of banks do it now, and you basically either get a lump sum or a monthly income. You do get charged interest I believe, but that is just taken off the house when you die and any money left over from the sale goes to whoever is in your will. Also you can't be owing them from what I read, so if you live to 120, you are laughing.

lisyloo

A lot of banks offer equity releases in your home.

Bobs wife is 49 so unlikely to qualify (which you'd know if you read it :-)

seatzie

lisyloo, thanks for the advice, thought it seemed too good to be true, someone buys half my house, I pay nothing, wife spends our mortgage money on other stuff lol!!