All About Right to Buy Mortgages

2007-08-09T23:00:00Z

Have you been renting a council property for more than two years? Do you wish to have a house you can call your own? Well, now you could realize your dream very easily, thanks to the Right to Buy Act introduced by the UK Government. In this article we provide detailed information on right to buy mortgages.

What is the scheme about?

The Right to Buy Mortgages scheme came into force in the year 1980. A right to buy mortgage basically means that any tenant who has been renting a council property has the right to purchase it at a discounted price. Council property refers to property that is owned by local authorities, non-charitable housing associations or even a housing action trust.

Who can it be useful for?

The right to buy mortgage scheme is very useful for people who have a poor credit history. Traditional modes of obtaining mortgages can be an uphill tasks for such people, especially when faced with situations like arrears on an existing mortgage, a default, a CCJ or even bankruptcy. We shall briefly explain each of these terms below:

Arrears: This refers to any outstanding payments or arrears to an existing mortgage. Having a background of arrears can often mean you'll find it very difficult to obtain a new mortgage through mainstream lenders.
Default: If you have been unable to make a payment on any loan, credit cards, etc., then chances are your credit file has been marked with a default notice. Such notices usually occur without the knowledge of the person. Unfortunately, it lowers your credit score, and it can cause difficulty in finding mortgages.
CCJ: If you have ever had a large bill amount that you could not possibly pay, it could result in a CCJ or a County Court Judgment. This is a record that is kept intact in your credit file for up to six long years, regardless of whether it has been cleared or not. However, if you do manage to clear the debt within a year, it will be marked as satisfied on the credit file, and this will raise your credit score.
Bankruptcy: People facing bankruptcy will not be able to apply for a mortgage as per the law. However there is a separate section of mortgage lenders who are sympathetic enough to grant loans to such people.

What kind of discounts are available?

A right to buy mortgage provides substantial discounts to potential homeowners. It serves to offer substantial discounts for those tenants who have lived in council property for over two years. For most people, getting a 50% discount is quite common. In addition, the scheme also allows for additional discounts to renovate an existing property. The percentage of discount offered will also depend to a large extent on the kind of housing it is.

Flats: Flat owners can be in for a pleasant surprise. The right to buy mortgage elaborates on the kind of discounts available for such tenants of council flats. After the completion of two years, flat tenants can avail a discount of 44%. Thereafter, with every passing year, an additional discount of 1% is applicable. A maximum discount of 70% can be obtained for such council flat tenants. Besides this, an additional discount may be available for the renovation of the flat.
Other houses: For all other houses, tenants can avail a discount of 32% after having stayed for more than two years. Every additional year will yield a further discount of 1%. Such tenants can avail a maximum discount of 60%.

The right to buy mortgage has made the dream of having one’s own property a practical reality. It has enabled people with low credit scores or those who are in a poor financial situation to buy their homes at discounted rates. With a right to buy mortgage, most of the monthly mortgage payments are significantly lower than standard rentals. This can further contribute to a reduced financial burden on tenants.

So if you wish to purchase your dream home without having to shell out a lot of money, then this scheme is ideal for you. Not only does it take care of the financial constraints of people like you, it also allows the dream of owning your home to become a reality.

If you'd like to speak with someone about finding the best right to buy mortgage deal, take a minute to fill out a short contact form, and a SimplyFinance representative will contact you shortly to introduce you to a mortgage broker. Your broker will work and search to find the best right to buy mortgage deal for you.

CLICK HERE TO APPLY FOR A RIGHT TO BUY MORTGAGE TODAY!

Shopping for a Right to Buy Mortgage

2007-08-10T00:00:00Z

The Right to Buy Act has helped millions of council tenants with poor credit history to purchase a home of their own. However, with the rising number of mortgage lenders that promise hefty discounts, how does one differentiate between the fake offers and the genuine offers?

Shopping for a right to buy mortgage doesn't need to be a harrowing experience. There are ways and means to identify if a company is out to swindle you out of your money or if they are genuinely providing helpful services.

8 Essentials You Need to Know

While shopping for a right to buy mortgage, it is imperative to get a few basics right. These can save you plenty of hassle down the years as well as save on your money.

Start early: One of the very first mistakes people make is to start the hunt for a right to buy mortgage very late. Usually the processing will take quite a bit of time, sometimes even up to three months. Shopping for a right to buy mortgage needs to start as soon as you get the offer in hand. If you don't start right away, you may risk losing out on the offer altogether.
Survey the property: It is essential that you take stock of the property you wish to buy. You may not have noticed the slight damages here and there while you lived in the house as a tenant. When you are a prospective buyer, you tend to see things in a different light. Even before shopping for a right to buy mortgage, be sure to check for any structural damages. This is important to do because eventually you will be responsible for any renovation needed. That implies that you will need to bear the brunt of all associated costs. Conducting a structural survey is imperative not just for personal satisfaction, but it is also a formality of the mortgage lending process. This is essential to gauge the level of financial security the property offers to the lender. It’s best to get a professional survey done through a qualified structural engineer, a surveyor or even an architect. Many homes have been demarcated as being defective as per the Housing Act. It may be very difficult to resell such houses. Therefore, although it may cost a couple of hundred pounds to get a structural survey done, it is well worth the effort. It is at times best to combine the structural report with the mortgage report. However, it is a good investment especially when compared to the cost of the property.
High rise blocks: If you happen to rent a council flat that is located in a high rise block, chances are you will not be eligible for mortgage finance. The primary reason for this is that such buyers have found it very difficult to resell their flat.
Seek professional help: If you are a first time home buyer, shopping for a right to buy mortgage may seem a daunting task. Therefore, it is essential that you seek the help and advice of an independent financial advisor. These advisors offer invaluable insight and tips on how to go about the process.
Life assurance: You may find that most mortgage lenders will need you to take out a life assurance policy with the same value as that of the property. Therefore, in case of unforeseen circumstances (such as your death) the loan gets discharged. Bee sure to shop around for the best cover possible.
Ask for a quote: During the process of shopping for a right to buy mortgage, you as a buyer are entitled to ask for a no obligation quote from mortgage lenders. Through the process of elimination you can select the lender of your choice, depending on the rate offered, the coverage, etc...
Seek a lawyer: Often the buying process will involve a lot of legal aspects. Whether it is for the purpose of negotiating the contract terms or any other such legal matter, be sure to get professional help from a qualified lawyer.
Check before you sign: Many companies offer money upfront to entice the buyer to enter into a deal. Be cautious with these types of offers. Be sure to read the fine print of any such offer to be sure there are no hidden catches in the contract.

If you are interested in finding out more about right to buy mortgages, fill out a short questionnaire, and one of SimplyFinance's representatives will introduce you to a right to buy mortgage broker. This broker will answer any questions you may have before they search the market to find the best right to buy mortgage for you.

CLICK HERE TO APPLY FOR A MORTGAGE TODAY!

SimplyFinance - Right to Buy Mortgage

All About Right to Buy Mortgages

Shopping for a Right to Buy Mortgage