Mounting mortgage debt fuels interest in sale and rent back schemes
Mounting mortgage debt fuels interest in sale and rent back schemes
Friday 11th July 2008
Sale and rent back schemes work by allowing homeowners who cannot meet their home loan repayments to sell their property and remain in the house as a tenant, with the new owner of the home then acting as their landlord.
In a poll conducted by price comparison site Fool.co.uk, 50 per cent of the homeowners surveyed said that they would open to participating in a sale and rent back scheme if they were at risk of repossession.
This is despite the fact that sellers typically only receive around 80 per cent of the market value of the home.
The willingness of Britons to consider this is indicative of the mounting pressure that higher mortgage repayments, coupled with soaring energy bills, is putting on household finances.
Financial advisers recommend that anyone worried about their housing repayments should seek out specialist debt advice over potential debt management solutions.
Individual Voluntary Arrangements (IVAs) and Debt Management Plans (DMPs) can often held avoid repossessions because they treat mortgage repayments as priority costs.
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