Not financially ready but want to buy?

 

Not financially ready but want to buy?

Many potential buyers in today’s market face the difficult task of getting a deposit together to satisfy mortgage criteria while at the same time paying rent. If you would like to buy a place of your own but are not financially in a position to do so then the Rent to Buy scheme might be for you. If you have missed all the hype about the scheme let us fill you in and tell you why it’s pretty clever.

Some people have called the scheme the ‘try before you buy’ option. The rent to buy scheme works similar to a lease option agreement in the commercial market giving you have the option to buy the property you are already living in on an agreed date after a certain period of time – usually 3 years, at pre-agreed price. At the end of those years if you decided you would like to buy the property all the rent you have paid will be offset against a deposit. If at the end of the three year period you decide you do not want to buy the property then you are under no obligation to buy it and can walk away. The only catch is that you may lose your deposit you paid at the beginning of the agreement. The deposit paid could be €3000, €5000 or 2% of the purchase price. This is not usually refundable.

What’s so great about Rent to Buy?

  • If you would like to buy a place of your own but are not financially in a position to do so then this scheme provides those who want to get on the property ladder a chance to do so.
  • Rent has traditionally been seen as dead money and these schemes allow you to put some of that money towards saving up a deposit for your future house.
  • You have the option to say yes or no.

Any catches?

  • The pre-agreed price! The catch with this is that property prices may drop further within the next three years and you are stuck with a fixed price agreement. Then again property price may also rise!
  • If you opt not to buy you’ll more than likely lose your deposit

Rent to Buy Schemes Advertised on MyHome.ie

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