If you are interested in our flexible Rent to Buy schemes through Homes With Options, you may have some questions about how it can work for and benefit you. Also, you may be wondering how eligible you are with regards to your situation or any financial concerns. We have therefore compiled a list of the most asked enquiries, regarding your situation as the Buyer. If you are considering this scheme, and if this is the right way for you to get a step up onto the property ladder, then please take a look at our answers below:
1 – “Is this legal?”
This is a question we get more often than we would have thought! Yes, of course Rent to Buy (Own/Sell) is a legal scheme, which creates a legally binding contract between you, as the seller and the buyer.
2 – “I am concerned about my credit / money situation”
This is a great reason to consider a Rent to Buy scheme. The majority of people who want to embark on Rent to Buy are people who want to own their own homes, but don’t have a brilliant credit score to back up a mortgage application. Through this scheme with Homes With Options, you can save up and create a better credit score while you live in your desired future home. Each month, your payment contributes to your future mortgage deposit, and you can save up far more easily than if you were solely renting.
Renting often seems as if you are throwing money away, and not putting it towards anything. This is not the case with our scheme. You are investing in your future, and your own home. If you are a first-time buyer, this is a great way to get onto the property ladder.
3 – “I don’t have any money saved for a deposit – am I still eligible?”
Unfortunately, each potential buyer needs to have a certain amount of money that they can put towards a deposit in our Rent to Buy scheme. However, this all depends on the value of the property you are looking to purchase. This deposit is agreed upon when you draw up the contract, and you would not have to give a large deposit again afterwards.
Often, you would only need to contribute £2000-£3000 as your deposit, so if you are interested then we advise that you start saving as soon as you are able. It is fully possible to come back to us after you have saved enough, and we will sort out your property and flexible Rent to Buy scheme.
4 – “I am self-employed – am I still eligible?” / “I am a single buyer – am I still eligible?”
If you are self-employed, but still bringing in enough money to make monthly payments towards your property and future mortgage, then great. You’d need 3 years annual accounts for your business when its time to apply for your mortgage. With Homes With Options, it doesn’t matter if you are self-employed, or your partner is self-employed, as long as you can afford the scheme and have enough money for an initial deposit.
Similarly, if you are intending to Rent to Buy as a single tenant buyer, then you are still eligible, depending on your money circumstances and whether you have sufficient funds to put towards the deposit.
5 – “Who takes care of the property and the maintenance?”
Whilst you are living in the property, it is usual for you, as the Buyer, to take care of any property needs, uptake and maintenance. The property is not a rental property; it is your future home for you to invest in and work on. Many Buyers like to invest on the property, and improve it as they are Renting to Buy, in order to attempt to improve the overall property market value.
However, prior to living in the property, if there are any parts of the property that need work, usually the Seller and Buyer will come to an agreement on who will be responsible. Although the property is generally in a decent state prior to the Rent to Buy agreement: any improvements that are needed will be decided on, and are different for every individual scheme.
6 – “Can the timescale be over 3 years – what is the most amount of time for this scheme?”
The timescale drawn up in your contract can be flexible to suit you, as the Seller, and the Buyer. However, we don’t advise that it be any longer than 5 years, or any shorter than 12 months. Also, currently, we don’t advise Rent to Buy schemes to be over a 5 year timescale.
Although it is possible to draw up a larger timescale, 5 years maximum, you would need to find the right Seller who would fully agree. Sellers usually want to sell their property as soon as possible, however, and may view 5 years as too long to wait. However, each contract is bespoke, and drawn up to suit both your needs, so we wouldn’t rule this out, but just advise that it would be quite uncommon. We suggest that approximately 2-3 years is the best timescale for this Rent to Buy, for both Seller and Buyer.
7 – “What if the property value goes up / down?”
The full property market value is assessed when we draw up the contract, right at the beginning of your Rent to Buy scheme. This means that the market value does not change throughout the time period, and whatever has been contractually agreed upon is the amount that the buyer will pay you by the end of the fixed timescale.
This is beneficial for you if the property value goes up, as you will still only have to pay the fixed sum agreed on at the start. This means that you would not have to contribute any more to the property, and many Rent to Buyers have been fortunate with the market value on their house. Also, many Buyers enjoy raising the value of the property further, through investing money and improvements towards their future home.
However, with this fixed sum, that means if the property value goes down, then you will still have to contribute the amount agreed upon in the contract. Saying that, you mustn’t worry halfway through if your property starts going down in value, as it depends on the sum at the end of the contract. Also, you have put money towards the property and invested in it, and must be aware that the market value could completely change when the time comes for you to sell the property, even further into the future.
8 – “What if my situation changes, and I need to back out of the agreement?”
If you need to back out of the agreed upon contract, at any time throughout the timescale, then this is fully allowed. However, bear in mind that this is a legally binding contract, and if you backed out, as the Buyer, you would have to leave the property as quickly as possible, and wouldn’t be able to claim back your deposit or any money you have put into the property.
This means that you would lose out on any money and time that you have invested into the property, and would need to save up for a deposit again. However, if the property is not a right fit or if there are any changes in situations beyond your control, we will take this into consideration and deal with each situation individually.
9 – “What if the seller backs out / wants to take their property back?”
If the seller backs out of the contract and scheme, at any time over the agreed timescale, then they would have to return any money that you, as the buyer, have invested into the property, including your down payment. This money invested includes potential work and improvements you have contributed to the property, which would have increased the market value. You would therefore not lose out on any money that you have put into the property.
Also, as far as your Rent to Buy scheme, this means that you can put your deposit and money invested back into a new scheme for another property as soon as possible. We can draw up a new contract with a new Seller in just 2 weeks after you have discovered your desired property, and we can assure you that Homes With Options will help you and your individual needs through every step.
However, we can also assure you that it is very unusual for a Rent to Seller to back out and leave a contract, as they would lose out on the deposit and any money and investment the Buyer has put into the property.
We hope that all of your Buyer’s questions have been answered. Also, check out our article here about how Rent to Buy what Homes With Options can do for you, and how Rent to Buy will benefit you here.
Although, if you do have anymore queries or concerns about Rent to Buy, or any other questions about your situation and what we can do for you, then please don’t hesitate to contact us for more information!