6. Financial aspects and how much does it cost. - ZoWy

Financial aspects and how much does it cost.

Agenda:

  • • Have a good understanding of all your cost associated with Rent‐to‐Own.
  • • Have a common knowledge about costs related to a property purchase in the UK.

Rent‐to‐Own financially means four sorts of payments.


  • Deposit payment.
    It is usually 5‐7% of the purchase price but might be higher due to your circumstances or financial position. The deposit is paid at the beginning of the Rent‐to‐Own term when signing the agreement.
  • Monthly payments
    It is due to be paid monthly. It combines your:
    • monthly rent together with top‐up capital repayments and legal administration fee on top of your rent payments. The rent is calculated as the typical rent for similar properties in a similar area.
    • home insurance, typically around £20 a month
    • if applicable, you will be required to pay your service charge and ground rent for your property. The typical service charge is £100‐£150 a month and ground rent £10‐£20 a month. It is nearly always payable if you Rent‐to‐Own the apartment.
  • Final purchase price
    It will be the difference between the purchase price, the deposit already paid together with monthly capital repayments and the mortgage.
  • Legal fee
    It covers the cost of drafting a Lease Purchase Agreement and other relevant documents. It currently stands at £1995 plus VAT.
  • Typical fees associated with the purchase in the UK
    ZoWy, as the portal, does not charge tenant‐buyers for their services. The only fee is for preparing the legal paperwork and liaising with the solicitor when buying the property. It currently starts from £1995 plus VAT and is deducted from the deposit payment.
    • Legal fee ‐ £1200‐£2000. It is usually payable at the completion of the purchase.
    • Mortgage Broker Fee ‐ £1000‐£2000. It is payable usually when the mortgage offer is issued. Most brokers work on a "no win, no fee" basis.
    • Property valuation ‐ £300‐£1000 ‐ payable at the start of a mortgage application.
    • Mortgage application fee ‐ £0‐1000 usually added to the mortgage
    • Stamp Duty. It is subject to changes, and it is recommended that each tenant‐buyer
    • keep an eye open for any changes. Currently, there is no Stamp Duty payable for First
    • Time Buyers for property up to £300k. See: https://www.stampdutycalculator.org.uk/ for more details
    Total fees connected with property purchase are between £2500‐£5000

    Conclusions:

    • • The Rent‐to‐Own current arrangement fee is £1995 plus VAT.
    • • Each tenant‐buyer pays: deposit, rent with extra payments and potentially additional deposit at the time of purchase.
    • • Typical costs for property purchase in the UK are between £2500‐£5000.

    Further reading:

Financial aspects and how much does it cost.

Agenda:

  • • Have a good understanding of all your cost associated with Rent‐to‐Own.
  • • Have a common knowledge about costs related to a property purchase in the UK.

Rent‐to‐Own financially means four sorts of payments.


  • Deposit payment.
    It is usually 5‐7% of the purchase price but might be higher due to your circumstances or financial position. The deposit is paid at the beginning of the Rent‐to‐Own term when signing the agreement.
  • Monthly payments
    It is due to be paid monthly. It combines your:
    • monthly rent together with top‐up capital repayments and legal administration fee on top of your rent payments. The rent is calculated as the typical rent for similar properties in a similar area.
    • home insurance, typically around £20 a month
    • if applicable, you will be required to pay your service charge and ground rent for your property. The typical service charge is £100‐£150 a month and ground rent £10‐£20 a month. It is nearly always payable if you Rent‐to‐Own the apartment.
  • Final purchase price
    It will be the difference between the purchase price, the deposit already paid together with monthly capital repayments and the mortgage.
  • Legal fee
    It covers the cost of drafting a Lease Purchase Agreement and other relevant documents. It currently stands at £1995 plus VAT.
  • Typical fees associated with the purchase in the UK
    ZoWy, as the portal, does not charge tenant‐buyers for their services. The only fee is for preparing the legal paperwork and liaising with the solicitor when buying the property. It currently starts from £1995 plus VAT and is deducted from the deposit payment.
    • Legal fee ‐ £1200‐£2000. It is usually payable at the completion of the purchase.
    • Mortgage Broker Fee ‐ £1000‐£2000. It is payable usually when the mortgage offer is issued. Most brokers work on a "no win, no fee" basis.
    • Property valuation ‐ £300‐£1000 ‐ payable at the start of a mortgage application.
    • Mortgage application fee ‐ £0‐1000 usually added to the mortgage
    • Stamp Duty. It is subject to changes, and it is recommended that each tenant‐buyer
    • keep an eye open for any changes. Currently, there is no Stamp Duty payable for First
    • Time Buyers for property up to £300k. See: https://www.stampdutycalculator.org.uk/ for more details
    Total fees connected with property purchase are between £2500‐£5000

    Conclusions:

    • • The Rent‐to‐Own current arrangement fee is £1995 plus VAT.
    • • Each tenant‐buyer pays: deposit, rent with extra payments and potentially additional deposit at the time of purchase.
    • • Typical costs for property purchase in the UK are between £2500‐£5000.

    Further reading:

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