9. What are my exit plans? - ZoWy

What are my exit plans?

Agenda:

  • • Understand what option I have when it comes to a Rent‐to‐Own exit plan.
  • • Understand the risk of each option.
  • • To be aware of the timing required for each option.

Rent‐to‐Own is designed for families looking to purchase the property after a few years.

Therefore, the main exit plan is the purchase of the property with the help of the mortgage. However, there are other options available when it comes to the exit plan:

  • • Assigning the Rent‐to‐Own agreement and let other people buy it instead of you.
  • • Selling the property on the market.
  • Purchasing the property.
    The central aspect is making sure you are eligible for the mortgage when it comes to completion. You are required to start working on your mortgage six months before the completion date. Ensure you have enough time to shop around and make sure you get a mortgage if some lenders decline you. You cannot miss the deadline as you risk losing a property altogether. The other time‐consuming factor is conveyancing ‐ the process of transferring ownership of the property, which your solicitor does. As it takes three months or longer, the timing is crucial to make sure you don't miss the deadline. The decision that you will purchase the property is required by the tenant‐buyer one year before the end of the Rent‐to‐Own period.

How about the other options if something doesn't go entirely according to plan?


  • Assigning the Rent‐to‐Own agreement to someone else.
    The reason for doing it might be everything. You may get some adverse credit, or you split up with your partner. Or your income is not sufficient for your level of mortgage required. It is a way out of it. One option is to add another person who will become a joint mortgage applicant. The other person may have an income you require and a good credit history. It can be your close relative or just anyone. Suppose you are adding or replacing a person who will purchase the property. In that case, you may wish to secure your ownership, especially if the other person does not contribute financially. It makes sense to request the tenants in common with the majority of shares staying with you. Legal advice is essential regarding it.
  • Sale of the property on the market.
    If you decided not to purchase the property for any reason, you need to inform us about it one year before the end of the Rent‐to‐Own term. We put the property on the market for sale for you. That way, when you sell, you are not losing your deposit and monthly capital payments.

    How does it work?
    Let's say your fixed purchase price is £500k. If you sell the property for above £500k, it is your profit. However, if you sell for less than £500k, you will make a loss. However, even with a slight loss with the price difference, you will likely save more on your deposit.


Further reading:

What are my exit plans?

Agenda:

  • • Understand what option I have when it comes to a Rent‐to‐Own exit plan.
  • • Understand the risk of each option.
  • • To be aware of the timing required for each option.

Rent‐to‐Own is designed for families looking to purchase the property after a few years.

    Therefore, the main exit plan is the purchase of the property with the help of the mortgage. However, there are other options available when it comes to the exit plan:

  • • Assigning the Rent‐to‐Own agreement and let other people buy it instead of you.
  • • Selling the property on the market.

  • Purchasing the property.
    The central aspect is making sure you are eligible for the mortgage when it comes to completion. You are required to start working on your mortgage six months before the completion date. Ensure you have enough time to shop around and make sure you get a mortgage if some lenders decline you. You cannot miss the deadline as you risk losing a property altogether. The other time‐consuming factor is conveyancing ‐ the process of transferring ownership of the property, which your solicitor does. As it takes three months or longer, the timing is crucial to make sure you don't miss the deadline. The decision that you will purchase the property is required by the tenant‐buyer one year before the end of the Rent‐to‐Own period.

How about the other options if something doesn't go entirely according to plan?


  • Assigning the Rent‐to‐Own agreement to someone else.
    The reason for doing it might be everything. You may get some adverse credit, or you split up with your partner. Or your income is not sufficient for your level of mortgage required. It is a way out of it. One option is to add another person who will become a joint mortgage applicant. The other person may have an income you require and a good credit history. It can be your close relative or just anyone. Suppose you are adding or replacing a person who will purchase the property. In that case, you may wish to secure your ownership, especially if the other person does not contribute financially. It makes sense to request the tenants in common with the majority of shares staying with you. Legal advice is essential regarding it.
  • Sale of the property on the market.
    Let's say your fixed purchase price is £500k. If you sell the property for above £500k, it is your profit. However, if you sell for less than £500k, you will make a loss. However, even with a slight loss with the price difference, you will likely save more on your deposit.
  • Further reading:

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