Right to Buy Deposit

Jakesmammy

Hi

I have just started the process of buying my council house under the right to buy scheme. The house has been valued at £80,000 but with my discount, the purchase price is £60,000.

Don't know a great deal about mortages so was wondering of anyone know what deposit I would need? Is it 10% of the property VALUE or purchase price?

Many Thanks

Thrugelmir

Mortgages are based on the purchase price or the market value which ever is lower. So in your case the purchase price.

The higher the deposit the better the interest rate you'll be able to obtain.

Jakesmammy

Brilliant! Thanks Thrugelmir

GMS

For a Right to Buy the lending would be based on the valuation, not the purchase price, and the deposit would be the discount so assuming you meet the lenders criteria you may not need to put in any deposit of your own.

Speak to a broker, they will be able to give you guidance.

Senior_Paper_Monitor

Policy varies by lender, but can confirm that many accept the discount (as published by council on valuation) as the deposit, with teh LTV against the value not purchase price - this only applies to formal 'Right to Buy' purchases (and very occasionally also to family purchases were the discount is effectively a family gifted deposit)

opinions4u

Halifax policy on RTB is to lend against the lower of market price or valuation.

In other words you should be able to borrow 100% of the purchase price (and may be able to borrow towards legal costs too).

Jakesmammy

Thanks for your help everyone - appreciated