Thinking of switching from mortgage to rent to avoid financial difficulties? Whether it's beneficial for you to come off the property ladder largely depends on your personal circumstances and what you're trying to achieve in the short and longer term. It's always been clear to us that some homeowners are not aware of the options open to them and don't take the first steps to seeking out independent advice. This is a must-do. We've included information about switching from mortgage to rent to avoid financial difficulties for anyone whose circumstances mean they're struggling with keeping up with payments, have a mortgage to pay off, or whose property is at risk from attenuating circumstances. Getting independent advice If you're unclear what your options are or don't know how to deal with your lenders then CAB and Shelter, two independent charities are good places to start. Both offer "no cost" advice. Chances are switching from mortgage to rent to avoid financial difficulties are not your only options. But may not know until you ask. Until you know exactly what choices are open to you we'd suggest you stay clear of any organisation who can potentially gain from your situation. This includes financial advisers and property companies. Both CAB and Shelter will be able to advise if you also need to get legal advice. The vast majority of people facing arrears, for example, don't necessarily know how best to handle their lender nor are they aware of the steps they should take if their lender starts repossession proceedings. For example, some of our clients have approached us after speaking to a local CAB office. Because they'd gone to CAB in the first instance, they were more certain of their options and the risks involved with each...A man who found himself unable to work following a horrific motorbike accident. The elderly lady facing a late in life separation but left to deal with a joint mortgage on her own.. This should put to rest the view that people switching from mortgage to rent to avoid financial difficulties have somehow brought their current situation on themselves. Who should consider moving from mortgage to rent? Selling to rent is suitable for  anyone who makes an informed decision that it's in their interest to do so. Unfortunately not everyone seeks out independent advice at the earliest opportunity. At its worst, the repossession process passes them by, they don't get legal advice and consequently end up with the prospect of eviction staring them straight in the face. However these are extreme cases. Switching from a mortgage to rent to avoid financial difficulties, doesn't have to mean you're trying to deal with arrears. On the contrary, people contemplating switching from mortgage to rent to avoid further problems down the line may be wondering what the options are for paying off their interest only mortgage. Other people are paying out on a mortgage and secured loans. What can some times tip people "over the edge" is either a loss of income or their mortgage coming off a fixed rate. This group of people can do well by re-fixing their mortgage, selling up and renting on the open market or possibly seeking a sell and rent back solution. But even these examples over-simplify the reality of many people's lives. Over the years we've learned that there are a hundred and one reasons why people consider switching from mortgage to rent to avoid financial difficulties. Other things to bear in mind include the availability of suitable mortgage products now that lenders have tightened up their criteria and the availability of reasonably priced property for rent in the immediate vicinity. There are pluses and minuses with all these choices and only you can decide what is best. Switching from mortgage to rent to avoid financial difficulties further down the line If selling to rent appears suitable for you there are basically two different options.  There are good commercial landlords and ethical sell and rent back companies to choose from. If you decide renting is probably your best course of action your situation will dictate which route is best for you. Uppermost on your list of criteria are likely to be an affordable rent and security of tenure. Bear in mind switching from mortgage to rent to avoid financial difficulties may result in renting bringing difficulties of its own! The main difference between renting back your home and renting on the open market is that renting from a commercial landlord leaves you free to sell your current home on the open market for best price. This may be a better solution if you have no fixed ties to the area and have time to wait for a buyer. Switching from mortgage to rent by selling on the open market will net you the most proceeds from the sale of your house. On the other hand a commercial landlord may charge you a higher rent and you may find yourself having to move frequently. And of course you'd have to give up your home. The major downside of the sell and rent back solution is that you will not get the full market value of your home, but you will be able to stay long term if you find a reputable company specialising in long term agreements. A sell and rent back provider may also be able to provide a range of different price and rent combinations for you to consider, some of which may be pegged below the market rent for your property. In either case Shelter or CAB can advise you of what your rights are as a tenant and what questions to ask to make sure any rental or rent back agreement is what you think it is. You'll find their contact details in our directory. Switching from mortgage to rent to avoid financial difficulties is a big decision. Make it an informed one.

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