Sell and Rent Back Could Be the Right Solution

Posted by admin on October 7, 2009 under Sell and Rent Back | Be the First to Comment

Before the recession a lot of financially troubled homeowners opted for sell and rent back schemes and most of them were very happy with their decision because when the recession hit they were in a much better situation to deal with the financial crisis.

During the recession many homeowners were constantly haunted by repossession and thousands lost their homes to the mortgage lenders and found themselves in a chaotic situation.

Some of these homeowners opted to go for a sell and rent back scheme instead of just giving away their homes to the banks through repossession. There was all sorts of havoc written in the media about this scheme and some harsh critics about sell and rent back. If you are at the end of the road and can’t keep up with your mortgage payments I am sure these critics won’t be there to help you. So the question is do you prefer to give your home back to the mortgage lenders or try sell and rent back? The choice is yours.

After all the benefit that the sell and rent back scheme showed to thousands of homeowners the authorities and the critics finally recognised that it can be the right solution for some homeowners. Following is a section of an article published in The Guardian newspaper:

‘Ed Harley, the FSA’s head of mortgage policy, said “sale and rent back could be the right solution for some consumers”. He said proposals regulating the conduct of companies, the quality of their staff and allowing customers to stay in their homes were the best solution for homeowners seeking to raise cash through a home sale.’

By Phillip Inman – The Guardian – Monday 28 September 2009.

Don’t just hand your home back to the banks, make an informed decision. Repossession does not happen overnight. You can see the signs when you start struggling financially. Fight for your home and try to find alternative solutions but be aware that getting further loans is not a good alternative solution as they will only make your situation worse.

When you ask for further loans it means that you are increasing your total level of debt and this extra debt is usually secured against your home. If you are unable to repay these loans the only option for the new lender is to repossess you. Now, instead of having just the mortgage lender to repay you will also have a secured loan to worry about. Extra loans only help you out in the short term. Once all the money has been used up you are left in a far worse situation that before.

Being repossessed is a dreadful experience and will cause great disruption to you and your family. Sell and rent back will offer the right way for you and no disruption at all as the only thing you have to do is sign contracts and collect your money from your bank account.

It is strongly recommended that once you have the cash from the sale of your house you pay off all your other debts not associated with your house and pay close attention to your finances from that point onwards. If you are careful with your finances you can buy back your house in the future. However, if you keep your old spending habits you will be in trouble again and this time you will have nothing to save you.