Quick House Sale, Rent Back To Avoid Repossession

We often overestimate the security of our financial position.

Many of us are content to live month to month just making ends meet, but rarely do we consider what would happen in the event of some extenuating circumstance, or something completely out of the blue that produces an immediate bill beyond your normal means. In situations like this, even the most prudent homeowners can find themselves in difficulty, and can face the possibility of missing that next mortgage payment.

As you no doubt know missing a mortgage payment can be fatal to your creditor relationship, that is the relationship you enjoy with your bank. Personally, bank managers will rarely have patience for 'problem' customers, and trying to reason and explain your case is not always as productive as you might like to think. In situations like that, it might be a good idea to consider a sell and rent back, enabling you to free the capital locked in your house without having to move to pastures new.

The sell and rent back process has been around for a number of years, but has only become really popular in recent times. Since the boom in house prices over the last decade or so, the number of people looking to cash in on the equity tied up in their home, for whatever reason, has dramatically increased. Whether you are in need of money to pay off your outstanding mortgage amount in a cash flow crisis, or you're just wanting to rest and enjoy your retirement, the sell and rent back option might be just what you're looking for.

In a sell and rent back, the buyer (usually a company specialising in this kind of transaction) will buy your house from you, and will then immediately install you as tenant. Legally, there is a massive change in your position from owner to tenant - functionally, you carry on living in your house, but get to enjoy the fruits of your hard work paying the mortgage over the years.

Naturally, the sell and rent back is more advantageous for those that have already paid heavily towards their mortgage. That way, you can pay rent whilst you live in the house and benefit from a substantial cash surplus over and above the outstanding mortgage amount. However, that's not to say the sell and rent back can't be a great move for those struggling to meet ends meet when the going gets tough.

Whether you're looking to enjoy your investment over the years, or looking to boost your short term cash flow in times of crisis, the sell and rent back move can be the best option for you provided you go with a reputable agency and understand prior to the transaction how much your house is actually worth. Remember to be wary of any offer made to you by these companies if you haven't already had an independent valuation, to ensure you get a realistic value for your home.

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