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 (also known as mortgage protection insurance) with the same value as that of the property. Therefore, in case of unforeseen circumstances (such as your death) the loan gets discharged. Be 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 we will put you in touch with a professional mortgage adviser from the SimplyFinance network. This broker will answer any questions you may have before they search the market to find the best right to buy mortgage for you.