With rising interest rates and home costs, not to mention the numerous foreclosures we are seeing all around us, many homeowners are now opting for the sell and stay option to keep on living in their cherished homes. A sell and stay transaction is basically a tax-free scheme that allows you to sell your home and then rent it back. You are actually changing ownership status but still continue living where you love to stay. This type of home sale is also known as sell and rent back scheme.
Why sell and rent?
There are many reasons why you would sell your home and continue living in it as a tenant. You could have bought the home at a time when ARM rates were low, giving you an affordable low home payment but with today’s rising interest rates, you are probably finding it increasingly difficult to keep up with your home payments. This is why many homeowners are now choosing to sell or foreclose on their cherished homes.
However, moving from a house you’ve lived in for years is often a difficult decision. Fortunately, with a sell and stay option, you can sell the house, pay off your debts, and still keep on living in your home as a tenant for as long as you wish.
The sell and rent back scheme gives you an opportunity to release the equity tied up in your home without having to move out of the property. All you need to enjoy the benefits of this scheme is to seek help from a good sell & stay specialist.
Who is it for?
Sell and rent back transactions are great options for any homeowner who wants to cash-out on his or her home without changing addresses. For instance, you may want to cash-out while the property market is still hot but have not yet identified your next house. There are numerous reasons why you’d need the equity in your home yet still continue occupying it. Retirement is a good example. If you have attained the age of retirement, you can release the equity built on your home and enjoy your retirement without moving simply by selling the property and renting it back.
Sell and stay is also an ideal scheme for someone with financial difficulties. You could be going through a difficult financial period and unable to keep up with your mortgages and other loans. In this case, a sell and stay specialist will help you cash-out the equity of your home and continue living in the same house after closing. You’ll also be given the opportunity to buy back the home later at a pre-agreed price if you wish to.
Keep in mind that as a renter of the house you previously owned, you’ll need to consider key factors in the rental agreement such as insurance, utilities, and who will be responsible for maintenance. The new owner should obviously be responsible for maintaining the home’s insurance and other costs since you have now relinquished all the home’s financial responsibilities, except the rent of course.