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Rent back due to divorce - everyone wins?

rent back due to divorce

Rent back due to divorce.  Choosing to rent back because you're going your separate ways sounds convenient in theory. But will it be as beneficial as you think? It can be a quick solution for solving your accommodation needs but is it affordable and will it be in your best interests?  Even if one or both parties feel strongly about staying in the house, it may not be as financially attractive as you think. There's no guarantee everyone's a winner. We're certainly not trying to put you off!  Just that you need take quite a bit into consideration.

Let us explain.

rent back due to divorce

No one can deny that renting back due to divorce is convenient. The attractions of a rent back can be as much emotional as practical particularly if you are divorcing on good terms or there are children involved. Solicitors can also be supportive when couples and families take the rent back option to solve their accommodation needs. But how do you assess the "cost" against these more emotional needs?

A rent back due divorce can initially sound attractive. On the plus side any decent rent back provider will ensure you have no outlays - no cash costs. So if cash is tight until everything is finalised this has to be a plus. By the time you shell out for agents fees and additional advertising costs - you can be talking about thousands of pounds, although fees can usually be paid out of the sale proceeds. But these costs shouldn't really be driving your decision.

rent back due to divorce

If you're counting the days until everything is done and dusted opting to rent back due to divorce can give you more surety on which to be base your plans and it can be a very quick process - much faster than trying to sell on the open market.

Waiting for a buyer to show up on the open market may take months. And even when they do there is still no end to the worry. Will your buyer get the finance they need? Or try to lower their offer after the survey? And if they're not chain-free what are the chances their buyer will pull-out. See what we mean?

These factors may play a role in your decision to rent back due to divorce. But it's not the full picture.

rent back due to divorce

What about the money side of things? A  rent back due to divorce isn't just about minimising disruption - it's also about money. Your money. So let's consider your income, the likely price and availability of rented accommodation in your area and current debts.

Income and rent

First income. If you use the rent back due to divorce option how will the rent be paid? Is the person remaining in the property working? On housing benefit?

Stop right there.

If you have been in receipt of benefits, or hope to be in the future it's imperative you seek advice to determine the likelihood that your changed circumstances won't put future benefit entitlement in doubt. Although policy varies between individual councils..you are more likely to find you're not entitled to housing benefit if you've sold your house at less than it's full value. There are exceptions but broadly that's the picture even if you're currently in receipt of contributions to your mortgage payments.

 rent back due to divorce

Other property for rent

Take a look at what's available for rent in your area. If there are comparable properties for rent at less than your current outgoings, it's worth thinking about whether simply renting on the open market will suffice. This can be a more sensible solution if you're only thinking of renting back short term anyway.

Likewise if you get further down the line with exploring the rent back for divorce option. You may find the proposed rent for your own home is greater than available elsewhere! This may have more to do with interest rates than profiteering by the provider. But the comparison can be very telling.

rent back due to divorce

Debts

A rent back due to divorce also needs to take account of your debts. Do you have debts to pay off? High levels of secure debt limit your options for selling.  And anyway, if considering a rent back for divorce surely you want as much debt settled as possible? Credit cards are different. Balances on these are not secured on your house. However smarter rent back providers will take these into consideration because they'll influence your ability to pay rent in the future. Ideally a rent back due to divorce should wipe the slate clean for you.

Look at this way. Having to service high monthly minimum payments on your credit cards can make you feel as though your treading water. Hardly the fresh start you thought a rent back for divorce might give you.

On the other hand if one party's been left in the lurch to pay mortgages or debts renting back quickly for divorce can prevent arrears building up.

rent back due to divorce

Sensible solutions DO exist

Clearly any long term rent back option has to be affordable..both today and tomorrow and the next day. Affordable in terms of what you can afford to pay and what you could reasonably be charged for comparable properties. You shouldn't have to pay a premium for the luxury of remaining in your home!

Renting back due to  divorce-related reasons can make your money go further. But you do need to consider the broader picture to decide whether you'll come out a winner.

For an initial discussion on how we  may be able to help with your plans call  0800 043 0669 or simply complete the short enquiry form below.

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Renting back for divorce
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