HOMEOWNERS / LANDLORDS: FAQ

  • I CAN’T SELL MY HOME AND I’VE NOW MOVED INTO MY NEW HOUSE SO HOW DOES THIS SYSTEM BENEFIT ME ?

    This is ideal for someone like you. You are probably paying for a bridging loan or another mortgage until you sell your original home. In other words you are paying two mortgages.
    You would grant us the right to 'rent now and buy later' backed up by legal paperwork. Under the terms of the agreement, we take care of the mortgage debt by 'babysitting' your mortgage and making the payments every month. The agreement also grants us an option to buy the property from you for a price fixed and agreed now at some time in the future, normally up to three years. We fund the mortgage payments by renting out the property to a tenant. They will be liable for all utility and council tax bills. At the end of the option period or even before it has expired, we will buy it.

  • I CAN’T AFFORD MY MORTGAGE AND I CANT SELL MY HOME. HOW CAN YOU HELP ME ?

    This is a way of solving a situation which could result in repossession if it is not tackled. Again we’d put in place a lease option. We’d lease the house from you with an option to buy it at an agreed time in the future.
    The only way we can make this work is if you move out and into another property. If the house had been repossessed you would have been forced to move out. But this way you are still in control of your own situation and you can get on with your life.
    You benefit in that your mortgage is being paid and you will get to sell your home when the market has recovered. It also gives you some breathing space without having to worry about paying a mortgage you cant afford every month.

  • I'VE NEVER HEARD OF THIS BEFORE. IS IT LEGAL?

    Absolutely legal!. Residential lease options are new to Scotland, although commercial lease options have been around for years, hence the reason you have not heard of it before. Residential lease options have been commonplace in Australia, United States and Canada for many years. But they have found their way over to the United Kingdom in the last year or so. They are being used more and more in England, but have just emerged in Scotland. We are one of the pioneers of this system in Scotland.

  • WHY HAVE THEY STARTED BEING USED IN SCOTLAND ?

    The credit crunch and the difficulties we are all facing in accessing mortgages have led to the emergence of rent to buy/own. First time buyers still want to get on the property ladder, homeowners still need to move, this is a creative way of getting around the problems associated with lack of mortgage finance availability in the present climate.

  • WHAT HAPPENS IF YOU DON'T BUY MY HOME AT THE END OF THE PERIOD?

    This is highly unlikely. But if it should, then you are free to sell it yourself. In three years time the market should have recovered and prices ought to have bounced back. Effectively, it means you stand to make more profit on the sale.

  • WHAT IF YOU DON'T PAY THE MORTGAGE ?

    We have no intention of doing that. But if we did then the contract we have with you is broken and you can sue us. We are serious business people and something like this would ruin our business, so we have no intention of breaking the contract.

  • WHAT IF I CHANGE MY MIND AND I WANT TO SELL DURING THE PERIOD?

    You cannot. The option agreement is irrevocable and legally binding. We will also take out a security over the property which will prevent you from selling without our say so. We have committed time, effort and money into setting this up and we only want to deal with people who are serious about selling their home this way.

  • WHAT ARE THE COSTS INVOLVED ?

    Costs are minimal. It's only really legal fees for drawings up lease option at the outset and in some situations we offer to pay them for you. Obviously you will have to pay solicitor fees when you sell your home at the end of the option period.

  • HOW DOES THE MORTGAGE GET PAID ?

    Initially we'd set up a direct debit to go into your account a few days before the mortgage payment is due covering the full amount of the payment. Then after a few months we'd arrange, if you agree, for the direct debit to come out of our account and go directly to the lender's account.

  • WILL I NEED TO TELL THE LENDER ABOUT THE LEASE OPTION?

    No. This is a contract between you and us. There is no legal requirement in law for the lender to be told of our arrangement.

  • DO IN NEED A LAWYER ?

    Yes. We can arrange one for you who specialises in this field.

  • HOW LONG DOES IT TAKE ?

    It's very quick. It can be done in a couple of weeks.