Archive for Financial Difficulties
Nov
17
Unaffordable Mortgage Leads To Intentional Homelessness
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A council tenant who decided to buy a house but could not then keep up the repayments on the mortgage, leading in turn to the house being repossessed, was found to have made herself intentionally homeless.
Mrs Watchman had a history of rent arrears when she and her husband purchased the property. The mortgage payments were significantly higher than the amount they had paid in rent. Some time later, Mr Watchman lost his job and mortgage arrears began to accumulate. The mortgage lender was granted a possession order and Mrs Watchman applied to Ipswich Borough Council for council accommodation.
The Council refused her request on the grounds that she had made herself intentionally homeless. The Council concluded that her husband’s loss of employment was not part of the chain of causation because it was inevitable that they would have got into severe financial difficulties. Mrs Watchman appealed against this decision, arguing that at the date she left the council accommodation, her future homelessness was not inevitable and that it was her husband’s loss of employment that led to her plight.
The Court of Appeal ruled that the Council’s decision was well-founded. The reviewing officer had been correct to take the couple’s past history into account and to consider what would have happened had Mr Watchman remained in employment. His loss of job accelerated their homelessness, but it was reasonable to consider that it was inevitable in any event.
“This case follows the logic applied in another recent case in which a tenant who moved out of her council accommodation into more expensive private rented accommodation that was beyond her means was also considered to have made herself intentionally homeless,” says Syed Talha Rafique(srafique@duncanlewis.com). “It follows that tenants considering such a move should do their budgets very carefully indeed and be able to show that their decision was financially viable at the time it was made should the worst come to the worst.”
Rent Back
Sep
19
2 Situations When Sale and Rent Back Is the Wrong Choice
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This article assumes you understand the sale and rent back process and will discuss 2 scenarios where selling and renting back your property is most likely not the best solution. If you are in these situations it is advisable you look at the alternatives which are suggested.
If you can reduce your monthly outgoings
Some people may find that they can reduce their monthly outgoings by consolidating their debts to a rate that is more affordable. This does not mean taking out more debts to pay off existing ones but getting all existing debts onto the best interest rate possible. If financial difficulties are causing you to consider sale and rent back it is often worth while looking at loan consolidation as a possible alternative.
This may allow you to keep ownership of your house but it does not guarantee that your future outgoings would be less than if you sold and rented back. If you are not sure what to do, it may be worth getting a rental quote from a rent back specialist (the good ones will give this free) and compare it to your potential outgoings if you consolidate your loan. This way you will be able to make a more informed decision.
When you want to get full market value for your property
If you want to get the best possible price for your property then sale and rent back is most probably not for you. Sale and rent back companies are not able to offer you 100% of the market value of your property due to the costs they incur buying it and the profit margin they need. Those companies that say they will offer 100% of the market value and rent your property back to you are most likely not telling the truth. They are trying to get their foot in the door and then will offer less. If they did offer 100% of the market value they could not survive as a business as they would incur a loss for every property they bought. Reputable sale and rent back companies normally offer up to 80% of the properties value.
You need to make sure you sell to a company that (1) is honest and upfront with you and (2) has a sound business model because if they go out of business there are going to be complications with you staying in your house.
If you want the best price possible for your property and do not need to stay in it then selling via an estate agent is the best solution. If you want the best price for your property, do not want to rent back and need a quick sale then a cash buyer is often the best solution. Many rent back companies can offer this quick cash sale service.
The bottom line is: sale and rent back is not the solution for those wanting full market value for their property and beware of companies that say they can offer this.
Quick House Sale
Jul
10
What is Sell and Rent Back?
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In simple terms, sell and rent back means you sell the property to the buyer and instead of relocating to another house you stay in the same house but as a tenant at an agreed rental price that you can afford. People generally plan to sell their house when they face certain problems like financial difficulty, Divorce, Emigration and Release Equity. Financial difficulties arise when a person is not in a position to pay mortgage amount on time. Mortgage problems arise due to job loss, health reasons, high interest rates etc. There is a solution to your problem. You can sell your property for cash to a specialist company and live in the same house as tenant.
People take divorce as they can’t get along well. Separation is a very painful process. In Divorce situation, couples plan to sell the house. But due to emotional attachment or reduce inconvenience one party decides to stay in the same property. A sell and rent back may be ideal in these situations. People who are planning to Emigrate may face the problem of selling their house fast. This may be a stress factor for them. The best solution would be to sell the house quickly to a specialist company and stay in the same house as a tenant till the time comes when they have to leave. Some people want to release equity for future purpose like starting business overseas or want to emigrate somewhere else. It may take some months if they sell their property through a broker. It would be best if they choose sell and rent back option.
If you are planning to sell the property to a specialist company they will find out worth of the property. They will find out what is the average rental figure in your area. The maximum rent that you can afford, which may or may not be as high as the average rent. Once the specialist companies have done their analysis they will find out if the package suits them and then discuss the figures with you over the phone. If you like their offer they will visit your property. It is not important that you accept their offer at this stage. Specialist Company will see your property and if they are happy with it they will confirm your offer. If you have any questions to be answered they will be ready to help you. If you decide to sell and rent back then Specialist Company will handle all the paperwork to you. It would be better if you appoint solicitor who will work on your behalf. The sale will take about four weeks from the time you accept the offer.
Sell and Rent Back
