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Selling and renting back to release equity

1 It is particularly well suited

 

Who should consider selling and renting back to release equity? In broad terms sell and renting back is attractive to:

- Homeowners looking for a more flexible option than traditional equity release products.

- Homeowners who don't fit the criteria for equity release products.

- People facing some form of financial difficulty.

More specifically:

1 Selling and renting back to release equity is particularly well suited to the under 50s who are unlikely to qualify for a traditional equity release scheme. Selling and renting back means you can have the security of staying in your home. This can be very attractive to families with young children or older people who are very established in an area or have relatives close-by.

2  If you'd like a break from homeownership - perhaps with a view to being a cash buyer next time round - selling and renting back to release equity can be the answer.  If your aim is to find another house to buy perhaps because you are downsizing this may well suit you. And possibly with no future mortgage either.

3 Selling and renting back to release equity is a more flexible option if you simply have other uses for your capital. This could range from paying off loans to simply wanting to enjoy your money or for investment purposes. It's not unusual for people setting up a business to use the equity in their homes to do so.

4. You want to release equity to fund your retirement. Perhaps you approached the banks to be were turned down? Perhaps you're looking for something simpler or are unable or reluctant to move? Either way, selling and renting back to release equity for retirement is worth considering if you'd like a larger cash sum to start with.

5 If you are facing repossession or clearing debts and want a fresh start, selling and renting back to release equity allows you to maintain a clear credit record, preserving your credit rating and get your lender off your back.

6 Are finding it difficult to cope with higher interest rates and want to release equity to clear their mortgage. Particularly if you'd like the opportunity to buy your property back in the future when interest rates start to go down. In a way, this is a means to protecting the profits you have already made on your property. It also means that your house can ultimately stay in the family. Not all professional property buyers will allow you to add a buy-back option to your sell and rent back arrangement.

7 Wish to release equity in such a way that you have substantial capital left-over to leave to other family members.

8 Your bottom line is that you care about the bottom line and simply want a better value product. Conventional equity release schemes rarely offer you more than 50% of the value of your home. Selling and renting back can offer you as much as 90% depending on your choice of supplier and your circumstances.

With the conventional equity release services offered by financial services companies you may be left with nothing. Which? calculated that if a 60-year-old borrowed 80,000 on an average Lifetime Mortgage it could end up costing 256,570 by the time they were 80 and 343,350 by the time they were 85.

Ready to find out more about selling and renting back to release equity?

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