“How To Get Onto the Property Ladder Now”
With the compliments of
A division of Ronan Property Services
Welcome to this free report.
It may help you to 'think outside the box' by suggesting creative ways of owning your own property that hadn't previously occurred to you, as you may have been unaware of them. After reading this report you will be able to give serious thought and consideration to the Rent2Buy concept.
To get the most out of this complimentary free report, print it out and read it at least twice making notes as you go along. If you have any questions or queries that would like to discuss, please feel free to E-mail us at firstname.lastname@example.org
Rent2Buy is a revolutionary concept for you to immediately move into the home of your dreams and after a specified period the option to own it. New to the UK but it has been the main mode of buying a home in the USA since the 1970's and is now widely used in Australia and other English speaking countries. It enables you to chose a home and rent it for a short period whilst you build up your funds for a deposit and then own it.
We are a company dedicated to helping first time buyers onto the property ladder with affordable scheme’s to achieve this aim. We believe that Rent2Buy investment is set to become the future as the best hope for the first time buyer. This new concept encourages tenant/buyers to choose and then create their home even before they actually own it and will go a long way towards solving the first time buyer crisis.
Rent2Buy schemes make it easier for tenant/buyers to plan financially and save for a full deposit. A short lease and the signing of a document called a “Lease Purchase Option” gives you the right to purchase the option and own the property at a price that is agreed in advance.
ARE YOU A FIRST TIME BUYER FINDING IT DIFFICULT TO GET ONTO THE PROPERTY LADDER?
Are you living in rental accommodation but can not save enough for a mortgage deposit as house prices keep going up?
Are you living with parents, in laws, or shared accommodation?
Are you still living apart but desperate to get together?
Is your credit history holding you back?
Is the price of property going up faster than you can save?
Many people are finding it increasingly difficult to get onto the property ladder. They may have the disposable income to afford a mortgage but lack the substantial funds to provide the required deposit and legal fees.
Are you caught up in the rental trap unable to escape as the price of property continues to escalate?
Have you got the disposable income to afford a mortgage, but lack the substantial funds to provide the required deposit?
The percentage of property sales to first time buyers has fallen to just 13%, the lowest in recent memory, says the National Association of Estate Agents and there is little prospect it can increase while prices keep rising. The current credit crunch has made the prospect of owning your own home, even more difficult to achieve.
Whatever your reasons rent2buy can help with a choice of clever schemes that allow you to choose your future home now and then rent it with an option to purchase in the future and at the same time allows for your deposit to be in place when you apply for a mortgage. As property prices continue to soar you can sleep easily knowing that the ownership of your property of choice is fixed and within your grasp.
We believe that a Lease-Option goes a long way to solving the first time buyer crisis. Once you take an option to buy, it will become your home, unlike some other new strategies such as shared ownership with government schemes or private developers. In our view Rent2Buy offers a refreshing alternative to traditional property agreements in the UK.
No More waiting Until You Can Scrimp and Save For a Deposit
A NEW FORM OF PROPERTY BUYING
This new form of buying property provides a refreshing alternative to traditional property agreements in the UK.
· Join by filling in the application form. It is FREE to join
You can join by filling in a short form with details of what type of property you require together with the first half of the postcode of where you would like to live
· and answering all the other information requested. We have tried to keep it as short as possible.
· Most important is the postcode area where you want to live. You can insert as many postcode areas as you like up to a maximum of 10.
· Your application will be registered by postcode and many property investors will request information on who we have waiting to become tenant/buyers in a particular postcode area when they have property that is about to become available for rent2buy. You will then be contacted with details of the property.
A lease option will get you on the property ladder before you ever thought was possible.
You can rent a house from us or one of our registered property investors knowing that you have the option of owning it at a future date that is not far away.
You agree a tenancy at market rents for a maximum term of years with a flexible option to buy it at any time between two and three years, example scheme 1 or 6 years example scheme 2, from the start date. You get to choose the date that you wish to take your option nearer the time according to your circumstances.
By signing the Option Agreement the sale price is fixed in example Scheme 1 or as indicated in example Scheme 2, so therefore you will get no nasty shocks such as prices rising out of your reach before you get to buy. There is also an example low cost start scheme where the rent starts low then raises gently throughout the rental period.
You get into the housing market at a time when perhaps the banks won't lend to you, for any number of reasons.
You get in by paying less deposit than the banks generally require, and it happens faster.
You are 'trying a property' before you actually buy.
The security of knowing that you are able to eventually own your home at a price you have budgeted for.
Protection against unexpected large rental increases.
You have several years in which to get your affairs in order so that you are accepted for a mortgage.
You have several years of capital growth. This means that by using any one of our recommended deposit schemes you will require a lower LTV (loan to value) when you come to buy.
An eventual asset as the equity in the property builds up month by month.
You will build up a track record as a good payer therefore increasing you credit rating with the financial institutions.
A part of the deal you take over the responsibility for the maintenance of the property so you can make improvements safe in the knowledge that the house is going to be yours and therefore increasing its future value to your own eventual benefit.
Don't miss out on property price appreciation.
Our Unique Schemes Allow You to Try Before You Actually Buy
CHOICE OF RECOMMENDED SCHEMES
Example Scheme One, Fixed Price
The price of the property is fixed for a maximum of three years.
You may exercise your option at any time between two years and a maximum of three years in the property.
The rent is also fixed for the three years so you can budget with confidence.
You will need a small deposit equal to a percentage of the agreed sale price. In addition you will pay an agreed monthly amount towards your deposit for a mortgage when you decide to exercise your option to buy. Both of the above will be deducted from the agreed sale price therefore providing you with a deposit as your chosen mortgage provider will base their mortgage offer on the current market valuation at the time. If the valuation is higher than the fixed sale price you may get cash back. However there could also be a shortfall which you would have to make up as house price valuations can not be guaranteed. However as your purchase price is guaranteed you can avoid any shortfall altogether by paying more into your deposit fund each month if you are able to do so.
Although the total monthly payments over a shorter period are higher than scheme 2, the overall cost of purchasing the property is considerably less in the long term
Example Scheme Two, Flexible Price.
This scheme is over a longer period of six years. The price of the property is estimated but not fixed and will be based on the current market valuation by a chartered valuer and surveyor three months before you exercise your option to buy at the six years stage.
The rent is higher than for scheme 1, but is fixed for the full six years.
You will need a small initial deposit equal to 2% of the projected base rate property valuation price at the three year stage. If you do not have the full deposit, we may in certain circumstances consider a lesser amount and tailor the remaining payments around your needs and circumstances. Unlike scheme one you will not need to pay an additional monthly amount towards your deposit. However in exchange for a higher rent you will receive cash back based on a share of the growth in the increased value of the property. This together with the refund of your initial deposit should provide sufficient funds for a deposit with a mortgage lender and may even result in cash back. The financial share of the growth in the valuation will be considerably more than the increased rent payable. As you are aware mortgage lending products and criteria are constantly changing therefore we can not give any guarantees as to what will be available in the future.
We will provide you with a computerised growth calculator based on the present property valuation and what can be projected in the future. You can exercise your option at any time after the end of the fourth year and finally at 5 years 9 months in time to complete by the sixth anniversary by which time you should have arranged a mortgage. Based upon today’s valuation of the individual property you are interested in, the increased value could be,
Increase in value after 3 years 15% Tenant/buyers share 2.45%
Increase in value after 4 years 20% Tenant/buyers share 3.55%
Increase in value after 5 years 25% Tenant/buyers share 5.41%
Increase in value after 6 years 30% Tenant/ buyers share 7.61% (exercisable at 5 years 9 months).
No More Throwing All Your Money Away On Never Ending Rent
Live Rent Free For Two Years. The above share of the increased property value, is in effect equivalent to approximately two years refund of rental that you have paid. Now that is a bonus.
Example Scheme 2a, Low Start Rent
This is an extension of scheme 2, where a lower rental is charged at the start and then raises by small affordable increments every 12 months over the six year period. The deposit required is reduced to £1,000. The overall effect is to pay the same amount of total rent over the six year period. This option is of benefit where earnings are going to increase following return to work after education, training, pregnancy etc.
We will always be happy to discuss your requirements and provide advice as to which scheme would be best to fit in with your present financial circumstances. Email us at email@example.com and include your landline telephone number and the best time to telephone you back and a consultant will do so if needed.
HOW THE SCHEME WORKS
Register you requirements as soon as possible. It is FREE to do so.
Fill in the details requested on the online form remembering to quote the first half of the postcode area where you propose to live.
Investors consult us for details of potential tenant/buyers who have registered in a particular postcode area where they prefer to live. The property investor will then contact you with the details of the property or properties that he has available.
Viewing will then be arranged and if you wish to go ahead the investor will then carry out reference checks and advise you on your suitability as a tenant/buyer. The investor will request the payment of an up front fee of approximately £50 each for the services of the reference checking agency. You will also be sent a financial spreadsheet or other details which will confirm the details of your financial commitments and also confirms the fixed sales price to you if applicable. Once you have confirmed your acceptance of this financial information and indicated that you wish to go ahead the Option to Purchase fee of approximately £300 will then be requested to ensure that the property is reserved for you whilst the paperwork is being prepared and signed. Please note that this is to pay towards legal fees and is non- refundable. No investor will proceed unless this is paid at this stage.
The Option to Purchase document and the tenancy agreement will be sent to a solicitor of your choice so that he can fully explain everything to you before you sign. Although this is not compulsory and you may sign it without consulting a solicitor, we do advise you to do so.
Once the documents and your deposit are received back the tenancy can begin. If you are unsure of anything whatsoever, then you should seek independent financial advice. If the signed documents and deposit are not received back within 14 days, then we reserve the right to offer the property to the next applicant and your option fee will be lost.
LEASE OPTION TO BUY
A Lease-Option refers to a tenant having a legal agreement with another party that allows them to lease a property as a tenant for a fixed term with an option to purchase the same property at the end of the fixed term at a price agreed at the start of the contract.
The option fee secures your “irrevocable right to buy” within an agreed period of years but it does not tie you into doing so.
HOW DO YOU EXERCISE YOUR OPTION TO BUY
You need to ensure that you have a mortgage offer in place before exercising your option.
You can exercise your option by giving notice as follows: When you want to option give notice at 3 clear months before the option date so that you can complete on time by the end of the anniversary. This notice period allows enough time for solicitors to complete all the necessary documentation to complete on time.
THE RENTAL PERIOD
The property will be rented to you on an assured short hold tenancy agreement.
The agreed rental is paid monthly by standing order.
As there is an option to purchase agreement on this tenancy you will be responsible for maintenance.
The rental is fixed for the duration of the agreement and will not be increased.
The full details are in the rental agreement which you should study before signing.
We will insure the building under our Landlords Insurance Policy during the rental period.
You are advised to take out insurance for your furniture and personal effects which are not covered by the investors Landlords Policy.
You must pay the rent on time every month.
If you fall more than two months in arrears at any time your Option to Purchase will be lost together with any deposits collected. The property investor will then begin legal proceedings for possession of the property.
Frequently Asked Questions
Q Why is rent2buy different?
A Many people who want to buy to own there own home have problems raising the required deposit which can be out of reach for years. They may also have previous credit card, student loan or other debts that are getting in the way of obtaining a mortgage. Rent2Buy offers them a way forward without finding a large deposit. You apply to go onto our register of potential tenant/buyers listing your preferred postcode area where you want to live. You will then be contacted with details of properties available or about to become on a rent2buy scheme that lets you rent it with an option to purchase it in the not to distant future, and with a much smaller deposit.
Q How do I/we build up a deposit?
A There are two example schemes that are usually available. In scheme 1 you pay an initial deposit. You then pay a fixed monthly amount agreed with us in advance. In scheme 2 you pay an increased rent over a longer period, but there are no monthly deposit payments as you benefit from a share of the increased value which provides a deposit.
The deposit payments are deducted from the final purchase price which then allows you enough deposit to obtain a mortgage as the valuation will be based on the house value at the time.
Q What do I/we put down as an option fee?
A A fixed fee of approximately £300 is charged. This is not refundable as it goes towards the payment of legal fees to set up the option.
Q What can we put down as a deposit?
A As a minimum you will usually be asked have to put down 2% of the final purchase price to you. This can be flexible dependant upon your finances which you can discuss with the investor offering the property. You may put down a larger amount which will reduce the additional monthly amount that you need to pay. You can also pay a higher monthly amount if you are able to do so which will reduce the final purchase price therefore leaving you increased equity in the house.
Q If we do not have the full deposit can we put down a lower amount? A It is possible that the investor may be able to work something out. As a smaller deposit will increase your monthly payments it will depend upon your joint income. If you can put forward a guarantor who will guarantee to pay the deposit if you fail to do so, then most things are possible. The guarantor will have to have the financial income and means to be able to do so.
Q Can I/we exercise our option before the end of the agreed term?
A Yes there is usually an earlier date that you may exercise the option if you are financially able to do so.
Q Are there any further costs when I/we decide to buy?
A Not from us. You are however advised to consult a solicitor to complete your purchase. You are advised to obtain at least three quotations for this work as conveyance is now a competitive industry. If you wish we can reccomend a solicitor to act for you.
Q I/we have a poor credit rating. Is this a problem?
A Having a poor credit rating need not always be an issue as you will have time to repair your credit rating before you exercise your option. Whatever the circumstances, the deal will be tailor made to suit your circumstances.
Q I have to give notice on my current rental property, when should I begin my application?
A You should apply as soon as possible so that we have time to create the best deal possible for you.
Q Will the rent go up during the rental period?
A Not in the first three years. If the option deal is longer than three years, then there will most likely be a small increase built into the agreement dependant upon each individual property on offer.
Q Will the purchase price of the house go up during the rental period?
A No. Not if the agreement is for three years or less. If it is longer than three years the purchase price will be based on current valuation at the time less deposits paid and discount given.
Q Do I/we need a solicitor?
A You are advised to consult a solicitor before signing the lease option but this is not compulsory, however you will need a solicitor to complete the final purchase.
Q Am/Are I/we guaranteed a mortgage at the end of the option period?
A No one can guarantee you a mortgage as it depends on many factors the most important being your ability to pay and meet your commitments. However if you have paid your rent and other commitments throughout the option period, you will have a good credit rating and your property investor landlord will convey this information to the proposed loan company. You may choose a mortgage yourself, however we have a panel of mortgage providers who will willingly provide you with a competitive quotation and full mortgage advice.
Q Do I/we have to exercise the option (buy the property) at the end of the agreed term?
A An option presents you with a choice. You have the right to back out. You will however have to vacate the property and you will lose your initial deposit and option fee.
Q What happens if my/our personal circumstances change?
A If at any time after the first six months you decide that your personal circumstances have changed and that you can no longer go ahead, then you may give one months notice to leave. You will have lost your option fee and your initial deposit monies that you have paid to date plus any other deposit payments up to a maximum of 2% of the agreed sales price of the property. You can not give notice during the first six months.
Q What happens if I/we can not pay the rent?
A If you fall more than two months behind you will lose your right to exercise your option to purchase and the initial deposit plus any deposit monies paid to date. The owner will then begin legal proceedings for possession of the property.
E-mail address for quick contact firstname.lastname@example.org and please give your landline telephone number in case we need to ring you back.
You can unsubscribe at any time.
By registering for this service you, will receive in advance notice and full information of properties that are about to become available in a specified postcode area of your choice.
Investors also regularly enquire as to if we have potential tenant/buyers in a particular area when they are considering buying or building properties. By registering your specific requirements with us you have the advantage that you may get the property you require before it is even advertised.
You can choose the postcode area that you need property in and the number of bedrooms. This service is free.
If you wish to register your interest in becoming a potential tenant/buyer go to www.rent2buyonline.co.uk and Click on the application form.
Please Note: The Rent2Buy schemes referred to are based on the originals used directly by the operators of this website. They are used as examples for your information, however Rent2Buy properties are offered by a large number of individual investors who may use variations of this theme. Full details will be provided to you when you express an interest in a featured property. Each investor has signed up as one of our Associates before being allowed to use the facilities of this site and has agreed to a set of rules and ethical guidelines for your protection.
Please note that we take the issue of privacy very seriously. Any information that you supply will be used in accordance with the Data Protection Act 1998 and other applicable UK legislation. The data you supply is confidential and will only be used within the businesses of Ronan Property Services to match your requirements for a property with an investor who has a property available or to introduce property related services to you that could be of use or save you money in the future. Your personal address and contact details will not be sold to any other organisation and only be revealed to the investor when you have expressed an interest in becoming a potential tenant/buyer for a particular property. Your data will be kept secure and will not be used for any other purpose or disclosed to third parties without your permission.
Copyright © 2010 Ronan Property Services t/a www.rent2buyonline.co.uk
You may copy this document and pass it or email it to interested friends who may be in a similar situation. The only restriction is that you cannot modify this document in any way shape or form or include any of the details in any other website without written permission from Ronan Property Services.