Further Reading

If your finances have gotten out of control and you find yourself unable to get out of the hole you are in, don't lose hope. You are not alone. Many people are in the same boat, having experienced an unexpected layoff or housing situation, facing bankruptcy just because of a turn of fate. You probably think that there isn't a way out of the fix you're in, but you need to consider an underused option: selling your house and renting it back.

Two years ago, single mum Clare Wilson was facing exactly this same situation. After she became disabled due to debilitating rheumatoid arthritis, Clare could no longer work. She received a small amount of money each month from disability benefits, but it was just not enough to pay her mortgage, let alone eat and care for her two teenage boys.

After trying to cope with huge bills and mounting debt for three years, Clare didn't feel that there were any options left to her. She was thinking about selling the home where she had lived for thirty years and moving with her two sons to stay in a small, crowded home with some of her relatives. Most places to rent in her area were way too expensive and there weren't any homes for sale that she could afford. She didn't know what to do.

Fortunately at the time that her home was coming under the foreclosure process a friend of Clare gave her a call to tell her that she had figured out how to sell and rent back her home. This news excited Clare and after she did some inquiring she realized that this was something that she could do, and she wouldn't have to end up losing her home in the process. The fear of having the for sale sign up in front of her house was alleviated.

Note how the process of sell and rent back works. A real estate firm dealing in repossessions and foreclosures buys Clare's home. A representative of the company would sit with her and help her decide the monthly rental rate most suitable for her. In this way she could select one that is low enough but still be able to make ends meet, but not so low where getting back her house would be quite long. The good thing about this is that the properties to rent back like Clare's would never change ownership.

When a person sells a house to rent back, their monthly payments help to build equity in the home. They can just continue to rent indefinitely, but they can also use their rent toward the purchase of the home. They can either save up a down payment in order to buy the house back sooner, or they can keep paying rent until they've paid the total value of the house. That way, a person can eventually buy back their house when their finances improve. Being able to stay in one's house also prevents any embarrassment arising from knowledge of one's financial straits becoming public, and they will still have the proceeds from their home available to pay off the bills that have become insurmountable.

Many people today are finding themselves in dire financial straits which are causing them to lose their homes. One solution to this problem is to sell and rent back your home. Through this process you sell your house to a company who deals with homes for sale through foreclosure as well as properties to rent back. Then you work with the company to set up a rent-to-own deal in which your monthly payments are drastically reduced. There are other repayment options available, and you build equity in your property against a time when you can afford to buy your home back.