Monday 17 June 2024
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Buying a house in installments without a mortgage: sale with retention of title

Retention of title was especially popular in the 1990s, when mortgages were hard to get and skyrocketing interest discouraged even the wealthiest. It is a type of sale which, strange as it may seem, is governed by the Civil Code and provides for the possibility for the buyer to enter the house immediately and pay the property in installments directly to the owner . Once the last installment has been paid, ownership of the property passes to the purchaser, who therefore becomes its legitimate owner in all respects

Advantages and disadvantages

Real estate leasing is a particular solution that has the great advantage of leaving the buyer the option to decide at a later time whether or not he wants to redeem the property , therefore it is decidedly more flexible than a sale with a termination condition or the mortgage itself . Furthermore, this method of purchase is particularly attractive for young people under 35 with an income that does not exceed 55,000 euros a year, because it entitles them to a series of advantages and tax breaks. However, there are disadvantages : in general, real estate leasing has a duration of no more than 15\20 years, and the monthly fee can reach quite high figures.

Cash buyers are famous for selling the home

Rent with redemption – rent to buy

To date, one of the simplest methods to buy a house without a mortgage seems to be that of rent to buy . The name is quite explanatory: a clause is inserted in the rental contract which specifies the possibility for the tenant to purchase the property in the future , thus putting the rental installments “to good use”. At the end of the lease you can then proceed with the classic sale – a mandatory step if you decide to opt for the rental with automatic redemption– which of course will take into account the monthly fees already paid. Also in this case the rent will be a little more expensive than normal, because it includes a small extra fee which is considered as a down payment on the future purchase, but it is a rather small percentage which, in general, does not exceed the 10%.