Getting deposit together for mortgage

[itsabreeze]

Would you go for this offer. Rent a house with agreement to purchase at market value 12/24 months later. Vendor would refund full years rent creating a substantial part of the deposit required?

So basically you would live rent free for a year?!

Wow. Completely depends on Who is offering you this? Would you definitely get all the rent back for your deposit?

Hmm, who decides what the market value is? How legal and binding will this agreement be?

I think I'd want this tied down in a very binding contract that I'd taken legal advise on. If it sounds too good to be true, it probably is. It sounds like a massive gamble for the owner because house prices could fall during that period meaning they get less money and lose the rent.

I wouldn't turn it down out of hand but I'd look at the details very carefully. Questions that spring to mind and if I think about it there will be lots of others

Will the rent be higher than you'd pay elsewhere?

Are you sure youd get a mortgage for the remaining value of the house?

Will the landlord want to retain a percentage of the rent as a management charge?

Will you be bound into having to buy the property at the end of the period? If so I would get a structural survey done before I signed anything to ensure you won't be letting yourself in for a very expensive long term problem

Sorry I'm a cynic

Are you legally required to buy the house at the end of the term? If so don't touch it with a bargepole. There are large numbers of people who bought off-plan housing with the idea they would get a mortgage when the place was built and then the credit crunch happened - they couldn't get mortgages and the builders held them to the contract. If I remember rightly the houses were often sold on the market for a lower value and the off-plan buyers were sued for the difference (often tens of thousands of pounds).

Also what if you lose your jobs at the end of the 12 months?

I agree with the poster who mentioned market value - no doubt the market value is decided by the vendor or their pet estate agents - ie they would never in a million years sell it on the open market for the price they expect you to pay.

Thanks for feedback but I am actually the Vendor. There is no legal or binding commitent on either side. If you don't purchase in the end, I lose nothing I have had your rent and you can walk away - I can then try to find another interested party. No losers only winners, I sell my property at the market value and help someone get on the ladder. Do you think if this came up in your area it would of interest.

Need to be careful about Stamp Duty - take legal advice

Itsabreeze. I personally love the idea if it is really as good as it sounds. This is probably the only way me and my partner will ever get on the ladder.