tenants right to buy mortgage

bruce2110

hello!

at the moment, we are council tenants with the right to buy. We have been approched by a company called tenants right to buy ltd and they are offering to help us buy our house. we have started the process and they have contacted the council to check if we are eligable to purchase the property which we are.

they came around to-night to run through the standard blurb and left a info pack ect, now they are going to ask the council to give our property a valuation ect, they said it could take upto 3-4months.

so, my question is what do i need to be doing in the mean time i.e research ect, and has anybody had any dealings with this tenants right to buy company as i cant seem to find very much out about them on net

they have said we don't need to raise a deposit as they this will be taken out of the current equity in the property(discount on the property) and the fee's they charge will also be taken from the discount the council give you.

is there any pitfalls i need to lookout for at this stage as i will be a first time buyer and don't really have a clue:rolleyes: when it comes to housebuying ect!!

cheers for any help/opions ect,

Bruce2110

tanith

I am not sure how they work this and someone with special knowledge will put you right but from what you have said surely this will mean taking out a bigger mortgage then the cost of the house to pay the company their fees... its probabely possible to get 100% mortgage therefore not needing a deposit and simply pay an ordinary solicitor much less than this company to do the usual conveyancing for you......
Someone will know for sure if this is possible...

good luck

bruce2110

hi! i not sure it would be 100% mortgage as they are saying that with the right to buy discount you get from the council, this is where they take any and all fee's required, plus the mortgages offered take this discount into consideration, so you don't need to provide the deposit! (i think thats what they meant anyway!!)

Bruce2110

Lagerlegs

bruce2110 wrote:

hi! i not sure it would be 100% mortgage as they are saying that with the right to buy discount you get from the council, this is where they take any and all fee's required, plus the mortgages offered take this discount into consideration, so you don't need to provide the deposit! (i think thats what they meant anyway!!)

Bruce2110

You don't need this company's help at all, you can do all of this on your own Once the council write to say you are eligible to buy then you tell them which solicitor you will be using and whether you will be funding the purchase with a mortgage. You just need to arrange a mortgage with a bank or building society for the discounted price of the house, good luck with the purchase.

jackieblue

Have they given you clear details of all their fees and charges ? You should be able to have them clearly presented/explained in writing .

You would also need details of all the mortgage-related and legal fees.

Once you know these costs, you may find ways of managing the process yourself which could make it considerably cheaper. If you do work with them, I would suggest you involve atn least one well-informed friend to read anything you sign and discuss every step here on MSE.

Perhaps you could ask them for references or referrals from previous customers.

It's important that although they could help you, you don't feel they are your only route to home ownership and please always bear in mind they won't be doing it as a favour to you or out of the kindness of their heart.

jackieblue

Lagerlegs,

I must have been typing as you were posting. I am glad you gave the response you did as I felt a bit bad being so negative - but I see big flashing pound signs when I hear of this type of service.

Cheers

herbiesjp

This sounds like one of those companies that likes to take advantage of people. They offer these services and charge high fees for the what they do.

They however do no more really than any ordinary whole of market mortgage adviser, in getting the mortgage agreed for you. So you can go via a mortgage adviser, fees free or not, but hopefully always pay less than these companies

lowis

hmmm...basically they aren't doing anything that you can't do for yourself. i am going through RTB at the moment and it is a very simple process.

council value the property, send you an S125 with the valuation and any details of estimate repairs/renewals/service charges. you decide whether to accept the valuation or not. if you accept then go and get yourself a mortgage, get the the survey done once the mortgage is in place, if the survey comes back and sounds OK then instruct a solictior - they then take the process from there.

and most lenders will count the discount at the deposit. nationwide and halifax do for sure.

if you don't mind me asking - why are you using this company? how much are they charging you?

asandwhen

I went through a similar company a few years ago the name escpes me now but were going to do a similar thing (sort out soliciters and mortgage) they were going to charge me £2000 which would be put onto the mortgage - After looking into this further a decided against the idea because I found I could do it my self at less than half the cost.

My verdict do it yourself!

bruce2110

hi guys and thank you for your replies,

they have given me a breakdown of the costs that they will charge:

£3,185.00 - there charges
+
£600.00 - solictors fee
=

£3,785.00

he did say that sometimes the solictors fees could increase depending on any boundry problems etc but should be no more than £4,000 on total.

so, going by the replies, it would be ok if i just approched the council directly and start the process off myself! i already bank with the halifax, so they are use to giving these types of mortgages already?

would they still take the discount as deposit as we are not in the position to provide any type of decent deposit at the moment?

cheers Bruce2110

Emmzi

Yes, they usually take discount as deposit. Many banks do a special 'right to buy' scheme too, where you may be able to add solicitors fees to mortgage.

So it should be just about picking what type of mortgage you would like!.

£3185... and they might get a commission from the end lender, too! Ouch!