Use a loan to pay the rent with ransom
While the Bank of Italy has made it known that the disbursements of Jecnaloan have suffered the umpteenth decline in April and that the banks continue to be reluctant to grant mortgages, the Italians try to identify other solutions for the purchase of property. In addition to putting the Jecnaloan on the market in comparison, citizens are more and more frequently informed about the different types of financing, from the Jecnaloan to the personalized ones, up to the loan for rent with ransom.
Nowadays the problem is getting a mortgage, more and more often the banks deny the requests. Therefore, it is frequently decided to inquire about Findomestic and its options, or Agos and Fiditalia in an attempt to find the most convenient way to obtain liquidity, most of the time aimed at investing in a property. With the ransom rent, even aspiring buyers who have been denied a mortgage can proceed with the purchase of the house.
Rent with ransom: what is it?
Instead of buying the property definitively, the buyer and the seller draw up a contract in which the monthly rental payments, based on the value of the house and the current interest rates, count towards a possible future sale. All rental fees are paid in advance by the purchaser and, if the buyer decides to exercise the pre-payment option, usually the interest rate applied is the minimum.
In essence, two agreements are stipulated: a lease and an option contract which establishes that the tenant, at the end of the established period, will have the opportunity to purchase the property at a fixed price. The price agreed for the future purchase is equal to the difference between the list price already agreed and the sum of payments already made. Here the loan comes into play, often required to redeem the house.
The loan for the redemption of the house
The bank offers supporting these transactions are still rather small. The operation allows the tenant to have a double possibility: if the property values fall to peak, the lessee can remain a tenant until the end of the contract; if the values instead increase, the rents depend on the purchase of the house within the agreed period of time, with the residual redemption that can be extinguished thanks to a bank loan.
It may prove to be an advantageous option for those who do not have liquidity for the immediate purchase of the property or for those who are denied the request for large sums, and must therefore resort to a more modest loan. The advantages for the tenants, as well as future buyers, are also tax: the IMU continues to pay the owner.
Even for the owner of the property this choice can be advantageous: the house will generate income on a continuous basis, with a higher monthly fee than a traditional contract, given that the purchase fee with ransom is equivalent to 1.5 times the market rent paid for similar properties.
If at the end of the contract (usually between 2 and 5 years) the tenant does not want to exercise the purchase option, he can continue to pay the fee set in the lease or, with 6 months’ notice, cancel and release property.