Rent only Diminishing Musharakah
Our Rent Only Diminishing Musharakah product is an arrangement between the Bank and the applicant. Both the applicant and the bank will each contribute a percentage towards the purchase or refinance of a residential property. For example, the bank may contribute 75% and the applicant 25% of the purchase price (for refinances, the applicant’s contribution is the equity in the property).
The Bank will lease its share in the property to the applicant for the duration of the finance term.
Over the finance term, the applicant will make monthly payments to the Bank which will compromise of rent only. This means that during the term of the agreement, the applicant is not acquiring any shares of the property from the Bank and as a consequence the applicant’s share in the property during the term will remain the same. In addition, the applicant’s monthly payments will also be lower when compared to our Acquisition Diminishing Musharakah product.
To acquire the Bank’s share in the property, the applicant will either need to pay part lump sum installments prior to each rent review (this is not possible during a fixed term period) and/or make a full lump sum installment at any time or at the end of the agreed term.
Until the Bank’s share had been acquired by the applicant, the Bank will charge the applicant rent for the use of its share of the property. The rent is calculated according to the respective shares owned.
Following the applicant’s acquisition of all the Bank’s share, either at the end of the agreed term or upon early purchase of the Bank’s share of the property, whichever is earlier, the Bank will transfer the full ownership of the property to the applicant.
Our Rent Only Diminishing Musharakah product is higher risk than our Acquisition Diminishing Musharakah product as the monthly payments under the Rent Only structure only consist of rent, whereas under the Acquisition Diminishing Musharakah product the applicant’s monthly installment consists of both acquisition installments and rent payment.
It is the applicant’s responsibility to make sure that they put in place, maintain and regularly monitor, any financial arrangement that is expected to provide a lump sum sufficient to acquire the Bank’s share at the end of the agreed finance term.
Acquisition & Rent Diminishing Musharakah
Our Acquisition & Rent Diminishing Musharakah product in an arrangement between the Bank and the applicant. Both the applicant and the Bank will each contribute a percentage towards the purchase or refinance of a residential property. For example, the Bank may contribute 75% and the applicant 25% of the purchase price (for refinances, the applicant’s contribution is the equity in the property).
The Bank will lease its share in the property to the applicant for the duration of the finance term.
Over the finance term, the applicant will make monthly acquisition installments through which the Bank will sell its share of the property to the applicant. With each acquisition installment, the Bank’s share in the property diminishes while the applicant’s share increases.
While the acquisition installments are being made, the Bank will charge the applicant rent for the use of its share of the property, the rent is calculated according the respective shares owned.
Following the applicant’s acquisition of all the Bank’s share, either at the end of the agreed term or upon early purchase of the Bank’s share, whichever is earlier, the Bank will transfer the full ownership of the property to the applicant.
Notes:
- At the end of the term, administration fees are payable in accordance with the Bank’s standard Tariff of Charges to cover the Bank’s administration costs.
- No early settlement penalties are payable when the Bank’s share is purchased by the Customer before the end of the agreed term.
- The Customer is responsible for their own solicitor costs, stamp duty and other conveyancing charges (such as land registry fees) at outset and on settlement.
Our Sales Process
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We then get terms agreed from our panel of lenders and send you by email a comparison of the market, you then inform us of which option you which to proceed with – you will get these within 20 minutes
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Once the case has been submitted and valuation report is back the case will be formally offered and funds can be made available to drawdown, subject to the legal due diligence being complete – From start to finish we can have deals ready in as little as 3 days with some lenders, on average it will take 7 working days. If you need the funds sooner CALL US NOW!!