Quick House Sale, Rent Back For Financial Security

From the point of view of the mortgage holder, meeting monthly repayment deadlines on an ongoing basis is seldom easy, and we spend most of our lives revolving around making those regular monthly payments.

The majority of households across the UK survive by making ends meet with little to spare, particularly when considering those families with small children to support for the life of their mortgage, which can often run into 25 or even 30 years. For that reason many of us look forward to retirement when we can reap the fruits of our decades of hard work with financial security and plenty of time to enjoy life.

Unfortunately, many newly retired people are finding themselves less well off than they had previously anticipated, and private pension funds almost consistently report a deficit in their trading year on year, increasing the likelihood of a widespread shortfall in years to come. Eventually, the pension kitty will run out, leaving our retired population short of cash. One solution that is becoming increasingly popular is the sell house then rent back model, which can allow homeowners to release the equity in their home without having to move.

Sell house then rent back may be the ideal solution for older homeowners, allowing them to reduce their potential inheritance tax liability as well as enabling them to enjoy their retirement by releasing money locked up in their mortgage. By selling your home before it falls under the inheritance tax trap, you could save your estate (and hence your spouse and children) 40% of the value of the home if you have a substantial estate to begin with, which could obviously prove a significant advantage. The process involves a rent back agent agreeing to buy and lease back a property at an acceptable market value, allowing the former owner to release cash paid towards the mortgage over the years. Obviously, the less money outstanding on your mortgage, the more money you can enjoy through the sell house then rent back model.

One of the major benefits of this strategy is that it allows you to cash in on the recent steep house price increases. The mortgage you took out to buy your home 20 years ago will now be worth a lot more money, and the sell house then rent back strategy can allow you to benefit from this extra capital. Of course the downside to this is that you will no longer own your home, and will be installed merely as a tenant in the property under the supervision of a landlord, i.e. the buy and let back agency, with a rent bill to face every month. However more positively it allows you to spend the money you've paid over all those years, to enjoy life to the full - whether that be through holidaying abroad or just improving your day to day standard of living, or alternatively you could invest the money in order to help offset future rental costs and generate extra income.

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