Council Right to Buy Mortgages
The 1981 Housing Act gave council tenants to right to buy the property they lived in from a housing association or a local authority.
Nearly all council tenants have the “Right To Buy” their home. This means you can buy your home from
- Local authorities
- Non-charitable housing associations
- Housing action trusts.
Qualifications for a right to buy mortgage Loan
- You must be the legal tenant of the property you wish to purchase.
- You must have been a tenant of a right to buy landlord for at least 2 years.
A discount will be offered as to lower the purchase price of your home and the amount of discount will depend the length of time your tenancy agreement with a right to buy landlord has been, and the type of property you are renting.
The overall cost for comparison is 4.2% APR. The actual rate available will depend upon your circumstances.
Most Mortgage lenders will lend up to 95% or 100% of the RTB Price (Right to Buy) but there are some that will allow you to borrow more then the asking price. mortgage lenders work on the OMV and the can lend up to 85% of the OMV. OMV= Open Market Valuation
Houses:
- 32% discount after two years + additional 1% for every extra year with a maximum limit of 60%.
Flats:
- 44% after two years + additional 2% for every extra year with a maximum limit of 70%.
Because as a tenant you can obtain a discount on the loan, right To buy mortgages usually cost less than a normal mortgage, and your mortgage payments are normally lower than rental payments.
Bad credit Right to Buy Mortgages
It seems almost impossible to find right to buy mortgages if you have a bad credit history, this seems a bit unfair as it is more likely you will have a bad credit record if you live in a council house