Sell And Rent Back: Avoiding Real Estate Problems

Are you or a friend or family member in a real state of panic over a mortgage payment out of control and out of your ability to pay? Is foreclosure a very real possibility that robs you of sleep and peace of mind every single day? If so, you need to know about a scheme to sell and rent back your own home that is legitimate and legal and that may be just the answer you need.

Properties available for rent back plans generally are those plagued with problems associated with adjustable rate mortgages. These mortgages had very low initial interest rates which allowed buyers to purchase the property with very low initial monthly payments. The assumption was that people would experience steady increases in wages over time and would be able to afford increasing monthly payments in line with the increased interest rates.

The economy turned down, as it does periodically, and disaster befell those whose incomes did not match the optimistic projections. Foreclosures and repossessions are now the order of the day, and to date the government has declined to step in and bail borrowers out. For many, the only real alternative is a sell and rent back plan, which offers at least the security of not being put out on the street, and the possibility of being able to own it sometime in the future.

Deciding to sell and rent back your house takes a little time to arrange so the first thing you want to do is find an institution or bank that specializes in this type of contract who will buy your property and accept you as a client. It is important to make sure the company is reliable with good ratings in this type of transaction.

Next, according to the terms of your contract to sell and rent back you will make a deposit like any rental in some cases, and will pay a fixed and predictable monthly rent, usually based on local averages, for a set period of time, typically about one year. This may be renegotiated or allow for indexed price changes after the time allowed.

The really great part is that most of these contracts also have a provision or clause to help you purchase the home again within a certain number of years when you can get a new loan that you will be able to afford down the line. You not only avoid having to move out, but even preserve the chance to be a homeowner again in the same location. Anyone struggling with the looming threat of defaulting on a home should at least consider a sell and rent back plan to save the family residence.

In recent years, adjustable mortgage rates have allowed people to easily buy a home or other real state. However, the assumption that income would increase over time to allow the higher charges once the introductory rates expired has failed for many people. Homes for rent back plans can be a good option for home owners who are facing foreclosure or eviction to allow them to stay in their homes. Under this plan, a home owner can enter into a contract with a financial institution to sell and rent back the home from the financial institution, with the option to buy it back again later.

- Peter Shukla

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