If you are in a financial crunch and are unable to pay your property mortgage, a mortgage rescue scheme can come in handy. Government authorities, household societies, or social landlords may offer these schemes. But a UK Mortgage rescue scheme differs from the schemes run by firms or individuals. Privately run schemes are mostly sale-and-rent-back schemes, sale-and-lease-back schemes, or simple buy-back schemes.

What Do They Do?

Broadly, a mortgage rescue scheme offers help in a couple of ways. These are as follows:

• A scheme provider can buy out your entire property and rent it back to you. This way you are not required to pay any mortgage and can continue to stay in your own property.

• A scheme provider can buy your property in part so that you can remain a shared owner. This way the rent and the mortgage both are shared and your financial burden is relieved to a certain extent.

Enrolling for a mortgage rescue program, put forward by the government or otherwise, is an important decision to take. You need to adopt an informed approach before attempting to go with one of these. Checking on the prerequisites as well as terms and conditions are mandatory. You need to understand how a particular scheme affects your financial as well as residential status.

Points To Take Note Of

It is important to make a list of important points to be taken care of before signing on any mortgage rescue scheme agreement. Some vital points which must be included in this scheme are as follows:

• What is the type of tenancy that's being offered to you in lieu of your property? If the tenancy is limited to a certain period of time, can you renew it? If you can, what are the terms and conditions for the same? Do they suit you? Under what circumstances can the landlord resort to court orders or other legal assistance for evicting you?

• What are the pre-conditions on the basis of which the rent is set? How often will it appreciate and by how much? Has the appreciation percentage been fixed with mutual agreement? If not, are you at least comfortable with the designated amount?

• The responsibilities and obligations of both parties need to be planned clearly. There can be multiple confusions pertaining to the same. Therefore, you need have it laid out in black and white. Clarify each of your responsibility and obligation with the landlord and arrive at a consensus.

• If your financial condition improves with time, can you buy back the shares of your property and reclaim ownership? If there is no such clause, you will never be able to own back your coveted property, despite having the resources at hand.

There are other factors too which you need to keep in mind. For instance, you should remember that you will be deprived of all housing benefits if you sell your property and start living in it on rent. You need to be fully aware of your situation before getting into one of these schemes.