Although there are many different benefits that can come out of a sell and rent back scheme it helps to be aware of some of the risks that can be associated with it. These risks are ones that deal with a variety of factors that you should know about before you get into this type of plan. They can easily influence various things with regards to one's home.
The first risk comes from how you will no longer be the owner of your own home when you get this type of plan. When entering a sell and rent back scheme you are essentially giving your home out to another agency that works with this type of plan. You are simply going to be seen as the renter of your property.
With this in mind the ability of you to do certain things in your home like make massive renovations or other types of services on your home could be extremely limited. In some cases a contract might be able to say otherwise but this is not always going to be the case. You will need to check your contract carefully to see what this part of the deal entails.
In addition to this while you will be able to pay a rent charge that can be lower than that of what you were originally paying with your mortgage there is no guarantee that the rent charge will be the same during the entire life of your scheme. There is always the risk that the value of your rent payments could end up increasing over time. This can happen due to a number of things including the possible increase in the value of the property that is being used in the contract over time.
You will also be able to get less money off of your home when you sell it and get into a sell and rent back scheme than if you sold off your property altogether. In many cases a traditional type of sale can be one where you can get close to what the property value of your home was. In this type of scheme you will end up getting much less than what you were originally going to get from your home.
While it is true that you can get into a sell and rent back scheme without having to deal with any repossession concerns you should know that you can still become eligible for repossession later on. This will come in the event that you fail to pay off the rent that you will have to deal with. When this happens you would be removed from your property and you will be forced to go somewhere else for a home.
Finally there is the risk of what could happen in the event that the agency that you handle a sell and rent back scheme with folds or goes out of business. If this happens you will be forced to either buy your property or be evicted from your property. This comes from how your property would be placed in the open market as soon as your home is no longer under the control of a scheme. These risks are important to consider when getting into this type of scheme. While you can get all sorts of helpful benefits off of a sell and rent back scheme you can still be at risk of being evicted and you can get less off of your home with this type of plan. Be sure to consider these factors when you are looking into getting into one of these plans.
Steven Martin is a FSA interim authorized provider of quickpurchase.co.uk/content/sell-and-rent-back Sell and rent back and also provides a Quick property sale and Stop repossession service. He works at quickpurchase.co.uk quickpurchase.co.uk
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