by mattg on August 23, 2010
If you find that it is impossible to keep up with your mortgage repayments, but you still want to stay in your current home, you might want to give consideration to something called ’sell and rent back’. Usually when people do not have the finances available to keep up with their mortgage payments, they think that only have the option to put their house up for sale, or to have the mortgage lender repossess it. Either of those two options have obvious drawbacks, especially if you have a family to look after and do not want to put them through the stress and hassle that moving house entails.
After you have sell your house to a sell and rent back company, you retain the legal right to buy it back from them at a later date if you wish to do so. Therefore, if your finances improve in the future, you can regain full ownership of the property. The process begins by you filling in an online form on a sell and rent back company website. Within 2 to 3 days you should hear back from them. They will give you an estimate of how much they would be willing to buy your house from you for.
If their informal offer is of interest to you, one of their employees will contact you to make a formal offer and to discuss the intricacies of the process. The employee will detail the stipulations of the offer, such as the amount of rent that would be required and the terms for buying back the home at a later date. All of the details of the contract (the rent, quote, and buy back amount) will be tailored towards your specific circumstances, with the aim to make them as realistic as possible.
There is a big difference between selling your house through a real estate broker and selling to rent back. There are pros and cons to both options but, ultimately, you may not really have a choice. If you need a quick sale and do not want to move house then using a sell and rent back company is literally your only option. If you can afford to wait months to find a buyer on the general market then you would likely be able to sell your home for a higher price though.
If the sell to rent back scenario fits your needs, sales can be finalized in just a few weeks. If you are facing foreclosure or eviction, most sell and rent back companies will not be put off dealing with you. Even if you have already received a notice of foreclosure or eviction, these companies can still work to save your home before the deadline comes. So, however bad you think your situation may be, there is still hope for you to remain in your home.
by mattg on August 10, 2010
In short, a fasttrack mortgage is one in which the bank does not demand that the customer proves their income. It is faster than a normal application as payslips and other proofs of income do not need to be passed to the building society for their scrutiny.
Who is eligible?
Typically the mortgage would be for less than 75% of the value of the house being bought to be eligible for a fasttrack mortgage, but several lenders are creeping this limit up to as high as 85%. But, merely because the mortgage counts as fasttrack, does not mean that you will never be asked to prove their income.
Fasttrack is not self-certified
A fasttrack mortgage should not be confused with self-cert mortgages or other be considered to be a loan that you might get without any form or proof of an income. At any time between application and completion, your bank might demand proof of income and a failure to be able to prove your income could result in a refused application.
A proof of income is still a requirement
And only because your loan to value rate is sufficiently low and your credit rating high enough and you are offered a fasttrack mortgage, it does not mean that you will never have to prove your income. Numerous building societies are now protecting their own backs by instead of getting borrowers to prove their income to the lender, they demand that the mortgage broker who is dealing with the application checks the level of income.
So even with a fasttrack mortgage you are likely to still have to prove your income and the just real saving is to the building society offering you the loan. Instead of them having to confirm that you do earn enough to cover the loan, they just get a tick in a box from the broker, who has done all of the checking on their behalf.
Who could benefit?
Who then, might benefit from a fasttrack mortgage? Well, it is very difficult to say really. You need to be putting down a sufficient deposit to be eligible and then also have a very good credit rating. So, you need to be good for the loan.
You do have to be able to prove that your income is sufficient to cover the loan, in case you are one of the random group of people that the bank will check the income status of, or in case your broker is expected to verify your income.
Really, to be eligible you must be one of the eligible customers for any other type of mortgage that is on the market.
The fasttrack saving
The just real saving to you as a buyer is that the application might run slightly quicker because the income details are not passed to the building society, merely a confirmation that you are earning enough. That is why it is a fasttrack mortgage, but the saving in time may not be that remarkable.
Written by Keith Lunt of http://www.comparemortgagerates.co.uk. If you want to know more about how to compare buy to let home mortgage rates, call in!
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