You may have been a council tenant for many years and perhaps it has never occurred to you that you could ever be a property owner. However, the Right to Buy Scheme is there to help you get on the property ladder.
If you aren’t sure where to start with your search for a Right to Buy mortgage, your first step should be to consult a mortgage broker.
Under the Right to Buy scheme, you can buy your council home if you have lived in it for two or more years. What makes it an excellent deal for you is that you get a good discount from the local authority – this basically means you don’t have to find a deposit. After five years you can sell it at its market value and move on up the ladder.
Your mortgage broker will help you decide what is the best type of mortgage for you. You would most likely be best with a long-term discounted, fixed-rate or capped Right to Buy mortgage.
But not everything is straightforward in moving from being a long-term tenant to being a home-owner. There are some things you need to watch out for. These include:
• Remember that making mortgage payments is different from paying rent. The council might have been sympathetic if you got into financial difficulties and couldn’t pay your rent for a time, but the mortgage lender won’t be nearly so understanding. If you default and are repossessed within the first three years, you will have to repay the discount you got on the house. Before committing yourself to a mortgage, ask your mortgage broker to help you work out exactly how much you can afford to borrow.
• You need to be sure that your employment situation is stable before you commit yourself to a mortgage.
• You can usually borrow an additional amount on top of the purchase price for home improvements. Naturally you want your home to look different now you’ve bought it! But don’t borrow so much that all your profit from the discounted price is frittered away. Take advice from your mortgage broker when you look for your Right to Buy Mortgage.
A Right to Buy mortgage can be a great help if you use it properly. Some things about it can seem difficult if you’re not used to property matters. But the mortgage broker is there to help you.
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