Quick Facts on Right to Buy Mortgage Discounts and Costs You should Know
If you’re thinking about getting a mortgage and buying some property, then you will immediately notice that acquiring that great home you’ve always dreamed of is not as easy as it seems, especially not if you have some financial difficulties. Luckily the government is there to support you, and you might be eligible for discounts thanks to some government programmes.
The right to buy mortgage is one of those government schemes that has helped numerous people on their way to improving their lives. It started in the eighties, and has (thanks to some changes in regulations about a decade ago), gained much more popularity. Here are some quick facts on right to buy mortgage discounts and costs you should know.
The good news: the longer you have been a tenant, the greater the discount you should be able to avail of. There is, however, a maximum limit. In London this limit is £104900 and in the rest of England it amounts to £78600. These discounts do increase each year according to inflation, however, so they may have increased in the meantime – check with your local office for details. In general, count on the following:
- For houses. If you’ve been a tenant of public housing, you should be able to get a 35% discount. This discount remains until after the fifth year, after which it increases by 1% for each year beyond the 5-year mark.
- For flats. The same rule counts as for the house, except that for the flat you should be able to get a 50% discount, and it increases by 2% after the 5-year mark.
Finding the mortgage
Some mortgage lenders do not cooperate well with the right to buy scheme, so in order not to waste time, you should ask advice from the right to buy mortgage office – they will be able to recommend lenders who are willing to accept such schemes.
You may not need a deposit; often the discount counts as a deposit. However, this depends on the mortgage lender.
Ability to sell
You’ll be able to sell at any time, but if you decide to sell within the first five years, you may have to pay back the discount – be aware and be informed.
Beware of one thing, however: the landlord is not necessarily required to repair the property just because there might be a sale. The landlord is indeed responsible for all the necessary repairs that they are legally required to do, but the sale in and of itself does little to change this; it doesn’t force the landlord to do the necessary repairs. It’s always wise to get a valuation of the property before you buy as well.
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AS A MORTGAGE IS SECURED AGAINST YOUR HOME OR PROPERTY, IT COULD BE REPOSSESSED IF YOU DO NOT KEEP UP THE MORTGAGE REPAYMENTS.
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