Right To Buy Mortgage

A right to buy mortgage is a government mortgage scheme that allows council tenants in the UK to purchase the houses they live in. These properties are often sold at a discount and in many cases, the tenants are not required to pay the deposit as well. Here, the councils let the mortgage borrowers put the discount offered to them towards the purchase price of the property.

A right to buy mortgage is subject to the same eligibility criteria that are applicable for a normal mortgage deal. The discount offered to the council tenants depends on a range of different factors, such as the type of property to be purchased, the location of the property, the value of the property at the time of application, and more.

It is advisable to work with an experienced mortgage broker to find the right mortgage lender and choose a deal that best suits your circumstances.

Eligibility criteria for a right to buy mortgage.

If you want to get a right to buy mortgage, here are the criteria that should be met for application the process to be smooth and successful:

• The property you want to purchase should be your main and only residence.
• The concerned property should be self-contained, i.e., you should not be sharing facilities such as kitchens and bathrooms with people outside the house)
• You should be a secure resident of the property, i.e., a legal contract exists between you and your landlord.
• You should have had a public sector tenant for at least 3 years.

Even if you meet the criteria listed above, the lender you approach would require you to meet their respective eligibility criteria for approving your right to buy mortgage application. They would perform affordability and credit checks to ensure that you are able to repay the mortgage on time.

If you are deemed eligible by a landlord or council for a right to buy mortgage, you can get a mortgage amounting to 4.5X, 5X or in some cases on your annual salary.

However, here are some of the major situations that can make getting a right to buy mortgage difficult:

• Bad credit – Bad credit implies that your credit score is poor due to delayed payments, defaults, bankruptcy, and other relevant factors. The final decision of the lender would depend on the severity of your bad credit.
• Age – Most right to buy lenders have an age limit of 75 for providing mortgages to borrowers. Some may go up to 85 or a little more. However, if the borrower is too old for the mortgage, it may be difficult for them to get their application approved.
• Non-standard construction – Some of the unique council properties in England may have certain elements of non-standard construction, such as timber frames, Concreate, flat roofs, etc. Most lenders consider properties with non-standard construction to be high-risk, making approval difficult.
• Owner occupier ratio– lenders want to see certain percentage of the development are occupied privately on mortgage or mortgage free. If high percentage of the property own by council then it is difficult to find the lender.

While it is difficult for borrowers to get a right to buy mortgage under these circumstances, it is not impossible. You can always work with your mortgage broker to find specialized lenders who would consider your application despite the factors considered unfavourable by mainstream lenders.

How to get a right to buy mortgage?

Here are the simple and straightforward steps involved in getting a right to buy mortgage:

Filling out an RTB1 application form

Start by filling out an RB1 application form. You can get a digital copy of the form by visiting the RTB website.

Getting your documents ready

Once you have filled out your RTB1 application form, you can start getting your mortgage documents ready. This is also the right time to get your recent credit score and download your credit report.

Look for a lender with help of mortgage broker.

Finally, consult your mortgage broker to find an ideal right to buy mortgage lender. Your broker would analyse your eligibility and find you a lender that is in sync with your requirements.

Especially if you are buying on right to buy, make sure you take the help of financial experts before getting your right to buy mortgage. Go ahead with the application process only if the conditions are ideal for you to get a right to buy mortgage.