Right To Buy Mortgage Advice
Right To Buy Mortgage | Mortgage Advice in Derby
Mortgage Advisor in Derby | Right to Buy Explained
Applying for a Right to Buy Mortgage
If you have been residing in a council property for a certain amount of time, then you may qualify for a Right to Buy mortgage. If you are granted a Right to Buy Mortgage, then you will be able to receive a discount from open market value if you decide to purchase the residence. The discount you receive will act as your deposit. The only cash you will need within the process will be for fees. Additionally, some Lenders will allow you to borrow additional money for Home Improvements – The local authority must grant you permission to do the works for this to be applicable.
The popularity of the Right to Buy was prominent in the 80’s but has seemingly been controversially political. The main reason that a segment of the general public were against this scheme would be down to the matter that it was taking homes out of the public sector when a housing shortage was already happening. Though many mature homeowners got onto the property ladder via Right to Buy and as such many of the homes on Council Estates are now privately owned.
If you want to obtain a Right to Buy Mortgage, you will need to check that you do actually qualify to purchase the property or not. You will need to get an application form (RTB1) and from there, your Local Authority will send someone so that they can value your property and inform you of how much it is worth. A percentage will then be calculated for the discount that you are entitled to and will write you an offer to proceed with the application.
If you do indeed wish to proceed, then the next step is to sign and return the form within the pack which is forwarded to you by the Local Authority and then you will need to set about trying to get a mortgage.
The amount that you are eligible to borrow is calculated in around the same way as any other mortgage would be; based on your income and expenditure. It is important to remember this fact so you are aware that you should cut out any unnecessary spending such as unused subscriptions and existing memberships which were set up before making an application. You should also check your credit score regularly online.
The fees that you may have to pay to progress with your application would normally be:
- Lender’s Valuation Fee (Some Lenders will do this for free).
- Lender arrangement fee (Though not all Lenders charge these).
- Mortgage Broker’s Fee (Our Mortgage Advisors will work through this with you).
- Solicitor’s costs.
Are there any restrictions?
Right to Buy was not brought in for the intention for tenants to profit from it. You must reside within a property for a certain number of years before you’re able to sell it. If for any reason the property is sold within the set time period then a penalty will be enforced. This is expressed as a percentage of the discount that you benefitted from in the first place.
Not all tenants within council properties exercise the advantages of having a Right to Buy as some do not want the responsibility that home-ownership brings or knowing they would have to do their own repairs. On the other hand, for the ones that do want to invest in the Right to Buy scheme, it offers the opportunity for First Time homeowners to take their first step onto the property ladder.