Right To Buy Mortgage Advice
Right To Buy Mortgage Advice from Derby Money Man
Have you been residing in a council owned property for an extensive period of time, you may well be entitled to be put onto the Right to Buy scheme. The scheme enables you to buy the property at a discounted price and that is classed as your deposit. Thus allowing you to use your money on remaining fees.
Also, if you wish to borrow money for home improvements for the property, you may be permitted by some lenders to do this, but you will need to gain permission from the local authority.
Right to buy scheme, what is it?
The right to Buy scheme was very popular back in the ’80s and deemed helpful by many who used it but also appeared to be a controversial issue with politics. One of the main reasons as to whether the Right to Buy should be active is that the scheme takes homes out of the public sector which doesn’t necessarily help when there is already a housing shortage. This has changed the dynamics of the council estates as more properties have become more privately owned. It would appear that current homeowners who are older were able to get onto the property ladder via Right to Buy.
Firstly to enrol for a Right to Buy Mortgage, you need to see if you’re eligible to purchase the property. Firstly, you will need a RTB1 which will be the starting application form – from here your local authority will send out a person to figure out how much your property is worth and you will be told the value. Following the valuation figure, you will then be informed of the percentage discount which you’re entitled to and offer you the opportunity to proceed with the process.
You will have to complete a form that the local authority sends to you should you wish to proceed with your application.
Calculating how much you’re able to borrow is the same as any other mortgage. Based on your income and expenditure, so even with a Right to Buy scheme, it is still as important to think ahead. Another vital factor is to check your credit score.
What fees are included?
As mentioned earlier, you will have to pay certain fees. These can include:
- Lender’s valuation fee (some Lenders do this for free, proving helpful to save on finances)
- Lender arrangement fee (Sometimes this isn’t necessary)
- Mortgage Broker’s Fee (An experienced Advisor will be able to support you through the process)
- Solicitor’s costs
The Right to Buy was set up to help individuals getting on to the property ladder. As such tenants are not permitted to sell the property for a certain period of time in order to prove they are using the scheme for the right incentive. If the property is sold within that period, a penalty will be issued. This will be expressed by repaying part of the original discount that was granted to you originally.
Some people don’t follow through with applying for a ‘Right to Buy’. This is due to certain responsibilities that are part of owning a home. As a home owner you will have the responsibility of carrying out repairs and maintenance. Those that do wish to take up the offer of the discounts will be able to utilise the scheme to help them become homeowners, whereas in alternative routes they may have trouble doing so.
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