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How Your Trapped Equity Can Help You In A Recession

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By : Rob Dot    99 or more times read
Although invariably they will affect the housing market in one way or another, different economic recessions can have different effects. Most often what we see is lending rates going through the roof and homeowners being left struggling to cope with hugely increased mortgage payments. In other cases, such as the most recent downturn, low interest rates and decreased deposits, combined with salary cuts and falling house prices, have led to severe borrowing restrictions.

With banks and other financial institutions so reluctant, or even unable, to increase lending, and tough economic times leading to increasing consumer debt, homeowners have found it harder and harder to make ends meet. Not only are many failing to keep up with mortgage payments and other financial commitments such as credit card bills, but their houses are losing value rapidly. The number of repossessions has hit its highest level since 1992 and the prediction for 2009 is that two thirds as many people will lose their homes than in the previous year.

How can a sell to rent scheme help? Actually, it provides two main benefits. First of all, the release of the equity from your home allows you to pay off any outstanding debts and potentially save your property from the threat of repossession. No matter where your debt originates from, the sell to rent option provides you with a fast solution which gives you peace of mind, but not at the expense of losing your home. At the same time as relieving your financial burden, you can still continue to live in your home as a tenant, and effectively buy time to find work, save and plan for your next home, re-establish your credit rating or whatever else you need to do to secure your future.

The other huge advantage to the sell to rent scheme, however, is the ability to lock in the existing equity in your property. Plummeting house prices have seen increasing numbers of people falling into a negative equity situation from which many will find it difficult, if not impossible, to recover. By selling now, and then continuing to live on in your home as a tenant, you can ensure that your existing equity does not dwindle to the extent where there is nothing left.

In a situation where unemployment rates are still rising, lending options are still severely restricted and pensions are steadily decreasing in value, using the equity in your home through the sell to rent option could be the perfect solution for securing your family’s future.
Rentback-Helpline is one of the leading UK FSA Regulated sell to rent back Advisors. If you want to sell and rent back your home or stop repossession then visit their website now

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