I want to remain in our marital home, but my wife is insisting on selling the house. (I can't afford to buy her out). I have heard about these companies that buy your house from you and then rent it back to you...
does anybody know anything about these companies? do they work, and are they a good idea?
No no no!
These companies give you an unrealistic value on your property. If say an estate agent values your property at 100k then they will give you something like 60k but charge you rent more on the 100k value.
Are you sure you cant afford the marital property? What about having an interest only mortgage for now? Maybe you can release some equity that way to pay her off? Just a thought, but unless you can say what your house is worth, mortgage ect, ect then I cant give you much help and neither can anyone else.
There is always a solution to a problem but please the one your thinking of isnt! Unless someone else can correct me.
High Paperbackwriter. My ex went down the 'sell and rent back' route, but I believe you have to be very careful. Firstly, they will all offer to buy at a discount to full market value. Secondly, some will promise you a contented retirement in your FMH, but this ain't gonna happen! They will give you the shortest possible tenancy, and then either crank the rent up on renewal, so it is no longer affordable, or simply refuse a new tenancy and require you to leave. Remember that tenants have virtually no security of tenure these days, so it isn't difficult for them to do this. The sooner they can get the property empty, the sooner they can sell at full market value and take their profits. I don't think all these outfits are so unscrupulous, but I would do some research before you commit yourself to anything
My recomendation would be don't do it. Sounds very risky. Sounds like companies preying on the vulnerable!
You'd lose substantial equity in the house. Then if they do increase the rent after the initial tenancy you could lose the house too. Apart from saving the disruption of moving, I can't see any plus sides to it.
At the very least, get an independant valuation done.
You have to be desparate to use these people - they've got to cover their costs (admin, solicitors, stamp duty etc;)and make a good profit and all that will come out of your pocket one way or another.
If you've got kids and are PWC, look at a Mesher order to see if that's feasible.
If you've not got the kids, IMHO it's best to bite the bullet, sell up and move on with your life.
I have to agree with louise you could look into an interest only mortgage for the time being. Its a bit like renting in a way and yet you get to choose the property you want to be in! Your own home!!!
Its like renting because you aren't paying anything off the capital but it makes the repayments cheaper. Once you get back on your feet you can remortgage back to a repayment method whereby you are paying money off the capital with a view to finally owning the property. Either way hopefully property values will continue to go up even if only a bit slower than they have done in recent years and on an interest only basis you wont make quite as much profit on your house as you would if you were making a repayment do you get my drift? Its not that painful most people are doing interest only these days its more affordable.
If you want to contact me by private message and give me some figures I could get a quote to you? Happy to help!