Selling and renting back your home

Yorkmackem

Hello, first time poster here. Just needed a quick word of advice if possible....

In serious financial difficulties with over £40k of largely unsecured debt, together with a mortgage with a balance of £180k held with NR which is presently on a fixed rate deal due to expire in about 18 months. House is worth around £200k and falling. Still have 24 years left to repay.

I'm currently paying back the unsecured loans by way of a debt management arrangement with the CCCS. Hasn't stopped the summonses landing on my doorstep though (but that's another issue).

Needless to say, my credit rating is no doubt abominable and will be for some years to come. The prospects of me switching mortgages at the end of my fixed rate deal are nil and I'm faced with an SVR when in truth, we're struggling to make ends meet as it is.

In the light of recent events I was therefore thinking of bailing out of the property market altogether, selling up to one of these companies that offer to buy your house and rent it back. As I see it its the only way to alleviate the current situation and avoid a likely negative equity scenario in the future or worse, repossession. With three kids this would be an absolute disaster.

Any comments / advice would be most welcome.

Cheers

LandyAndy

Don't sell it to one of these companies. They will offer you way under the market value and give you a six month AST and then evict you.

If you are going to sell get a quote from a buy ad rent back company and then try to sell on the open market.

neas

Sorry for your hardship, your a victim of the credit binge... and the hangover which is the houses dropping .

Hope it works out.. but I would say those companies are in business to make money and I doubt what they offer will even cover whats left on the mortgage... let alone give you anything left over to cover your other debts.

perhaps you could just sell the house and move into council housing?

pinkshoes

Those companies are scum that take advantage of those that have got themselves financially up sh*t creek without a paddle. Stay clear of the.

Put your house on the market ASAP with an estate agent, and sell for an average valuation (get a few valuations done), then find somewhere suitable to rent.

You'll have to pay EA fees (about 1.5% of house value), solicitors fees (about £800??), early repayment fee from fixed mortgage (see mortgage T&Cs), then moving costs, and don't forget you'll need a 1.5 or 2 month deposit to put down on a rental property.

phildamb

They aren't all bad. I dealt with a few companies on behalf of my parents when they decided to do this. The company I called couldnt make an offer but passed our details to one of their landlords who called and visited he offered £10k below the market value and all went well he even gave them the first 6 months at half rent! We did see some very bad ones at first who made rediculous offers of almost 30-40k below the market value, including one guy who looked about 19 and couldnt stop playing with his face the entire time he was talking. Its a case of doing your research and seeing as many as possible and getting a feeling for what sort of landlord they will be.

Dan:_4

Yorkmackem wrote: »

Hello, first time poster here. Just needed a quick word of advice if possible....

In serious financial difficulties with over £40k of largely unsecured debt, together with a mortgage with a balance of £180k held with NR which is presently on a fixed rate deal due to expire in about 18 months. House is worth around £200k and falling. Still have 24 years left to repay.

I'm currently paying back the unsecured loans by way of a debt management arrangement with the CCCS. Hasn't stopped the summonses landing on my doorstep though (but that's another issue).

Needless to say, my credit rating is no doubt abominable and will be for some years to come. The prospects of me switching mortgages at the end of my fixed rate deal are nil and I'm faced with an SVR when in truth, we're struggling to make ends meet as it is.

In the light of recent events I was therefore thinking of bailing out of the property market altogether, selling up to one of these companies that offer to buy your house and rent it back. As I see it its the only way to alleviate the current situation and avoid a likely negative equity scenario in the future or worse, repossession. With three kids this would be an absolute disaster.

Any comments / advice would be most welcome.

Cheers

You will get ripped off by these companies. You have 18 months left to run on your fixed rate, so I would not worry about it too much until then.

Remember - always pay your mortgage first.

Your unsecured borrowings is a second priority.

Conrad

The real issue is where these companies and landlords themselves go bust / get repossessed. In that scenario you will be evicted.

My youngest brother and his wife went bankcrupt. Nothing was repossessed, simply all thier unsecured debts were written off. Best thing they ever did.

Beware, middle men will advise against bankcruptcy as they earn nowt from such an action.

My brother went straight to the bankcruptcy people direct and everything was settled within 2 months and yes he was able to keep his Woolwich bank account and no he was not asked to shut down his business. People speak a lot of bar room expert style advice on this forum - go see the bankcruptcy people direct and DO NOT take anything the CA say as accurate - they are jack of all trade non specialists.

churchrat

hi
you have £180k mortgage + £40K debt and a house worth at the most £200.
Even if you sell at £200k and pay nothing in fee's etc you will still be £20k short that you will still have to pay.
I agree with Conrad--look at bankruptcy, it may not be as bad as you think and if you have little equity in your house you may be allowed to keep it. Ask over on the B'tcy board, get advice from cccs and cab. If you sell to a sell and rent back company you will still be up to your eyes in debt.
good luck
have you posted on the DFW board?

RAS

Hi

Please some professional and independant advice on your options, as you will have to anyway.

And certainly one option would be going BK, if there is little equity.

Scubabe

I am getting SO SICK AND TIRED of reading all the replies to threads like this saying that these "cash for your home" companies will rip you off, dig up your grandmother's grave, rape your wife and sell your children to an oil-sheikh. It is simply not the case!! It is not all doom and gloom like people on here make out. Sure, there may be some bad apples out there, but you cannot tar everyone by the same brush!!

I am selling my home to one of these companies and I have done my research and I have had 6 different companies out to quote me and have a chat about how they work.

These companies are set up as a way for people to make money, yes, certainly.
They will offer you less than market value for your house, yes, certainly.

But if you shop around you will easily find a good company who will
a) offer you a realistic market value (my house was given a very good market value, I would have been very happy to achieve that price in today's market considering the current state of our property)
b) then offer you a purchase price of 85% of that market value (they don't all offer just 60% of value, the good ones offer 85% as standard)
c) exchange/complete when you are ready
d) not require a HIPS
e) not request you to pay any valuation fees etc
f) if you choose to rent back, a *good and reputable company* will be ecstatic to have you as a tenant because they know you will care for the house well, they won't have an empty house waiting for a tenant with no rental income, they know you know the area and are happy there etc so won't want to move in 6 months time.....

The good ones, sure you may have to search around a bit, but the good ones are out there and they will not rip you off, they will not kick you out and make you homeless, they are there to make money, and they do that by buying your house under market value and then they have instant guaranteed rental income.
What's so bad about that? They're in it to make money so obviously you're paying for that priviledge, but there's no harm in someone making money... as long as you know about it and they're upfront about it.

My take on it is... yes, I am losing 10 grand on the sale of my house, but in the big scheme of things I don't think I could have really sold the house for the market value they quoted, so I'm probably only losing 5 grand, and half of that would have gone in solicitors fees, estate agent fees, HIPs fees, so really 2 grand is all I am out, and I am absolutely happy as larry to lose 2 grand for the sake of fast completion at my terms, to enable us to start a new life down south.

Please do your research and get a variety of companies in to your house for a chat and see what they can offer you... we're incredibly happy with the company we've picked and would recommend them in a heartbeat to anyone in a similar situation to us (we are relocating due to hubby's work and do not have time to put the house on the market, we needed an instant cash buyer who could complete in 4 weeks, I sincerely doubt we'd have found that on the open market in our area).

Good luck with your decision!!

ree1971

hi i am looking for a company like u have found could you give me there name so that ican get a quote from them please:T

=Scubabe;10057635]I am getting SO SICK AND TIRED of reading all the replies to threads like this saying that these "cash for your home" companies will rip you off, dig up your grandmother's grave, rape your wife and sell your children to an oil-sheikh. It is simply not the case!! It is not all doom and gloom like people on here make out. Sure, there may be some bad apples out there, but you cannot tar everyone by the same brush!!

I am selling my home to one of these companies and I have done my research and I have had 6 different companies out to quote me and have a chat about how they work.

These companies are set up as a way for people to make money, yes, certainly.
They will offer you less than market value for your house, yes, certainly.

But if you shop around you will easily find a good company who will
a) offer you a realistic market value (my house was given a very good market value, I would have been very happy to achieve that price in today's market considering the current state of our property)
b) then offer you a purchase price of 85% of that market value (they don't all offer just 60% of value, the good ones offer 85% as standard)
c) exchange/complete when you are ready
d) not require a HIPS
e) not request you to pay any valuation fees etc
f) if you choose to rent back, a *good and reputable company* will be ecstatic to have you as a tenant because they know you will care for the house well, they won't have an empty house waiting for a tenant with no rental income, they know you know the area and are happy there etc so won't want to move in 6 months time.....

The good ones, sure you may have to search around a bit, but the good ones are out there and they will not rip you off, they will not kick you out and make you homeless, they are there to make money, and they do that by buying your house under market value and then they have instant guaranteed rental income.
What's so bad about that? They're in it to make money so obviously you're paying for that priviledge, but there's no harm in someone making money... as long as you know about it and they're upfront about it.

My take on it is... yes, I am losing 10 grand on the sale of my house, but in the big scheme of things I don't think I could have really sold the house for the market value they quoted, so I'm probably only losing 5 grand, and half of that would have gone in solicitors fees, estate agent fees, HIPs fees, so really 2 grand is all I am out, and I am absolutely happy as larry to lose 2 grand for the sake of fast completion at my terms, to enable us to start a new life down south.

Please do your research and get a variety of companies in to your house for a chat and see what they can offer you... we're incredibly happy with the company we've picked and would recommend them in a heartbeat to anyone in a similar situation to us (we are relocating due to hubby's work and do not have time to put the house on the market, we needed an instant cash buyer who could complete in 4 weeks, I sincerely doubt we'd have found that on the open market in our area).

Good luck with your decision!![/quote]