100% Right to buy Mortgage - 34K Discount

deecy

Hi

We have full discount on our council house which equates to £34K off the value. The value is £220K we have to pay £186K if we want to buy.

Is it possible to get a lender to lend us 100% of the value so we can use the extra £34k - which we wouldn't need for the purchase - on improvements?

We aren't sure if a 100% mortgage is 100% of the value or 100% of the cost of the house.

Thanks in advance

RenStar

Hiya,

I'm pretty sure you can use the Council discount as a 'deposit' and lenders will treat it as such so it it won't technically be a 100% mortgage IYSWIM. Everyone I know who has bought through RTB seems to have done this. The obvious caveat is whether your income (s) would allow a lender to offer you the £186 you need. I would invest the services of a good broker who will be able to better guide you towards the right lenders. I'm sure some of the board brokers on here will be able to give you better information soon. Good luck in your purchase and I hope it all goes well for you.

deecy

Thanks RenStar

What does IYSWIM mean?

We've spoken to an IFA - he didn't instill much confidence, he couldn't work out what 12 x £1000 was!

I read on Moneyextra that we should be able to borrow 100% loan to value. It doesn't seem like a big risk to me, it's 100% of the value, not any more.

Myself & my partner earn 50K between us per year, £35K for me

silvercar

Normally mortgage calculations are based on the lower of the price you are paying and the value of the property. Though there is no problem remortgaging at a later date to release some of the value.

IYSWIM=if you see what I mean.

RenStar

You're welcome. Sorry IYSWIM = If You See What I mean.

Sounds like you should have no problems getting the amount you need. Persevere in finding a decent broker – believe me they are worth their weight in Gold. If you search this board, I’m sure there are some links to some fees free brokers that you can give a try.

Ren

herbiesjp

As long as you have a good credit history you should find plenty of lenders that could do this for you - assuming yu do not have debts in the background etc

HTH

asandwhen

Ok I did this a few years ago. This is how is works :

The discount is taken as your deposit and you can borrow into this discount BUT you can only borrow extra if you are using it for home inprovements - you need to provide quotes to the council for the cost of the extra borrowing then this gets approved and forwarded on to the mortgage lender by you soliciter.

Dont forget that you now have to wait 5 years before selling otherwise you payback some of the discount.

Antj29

as above, yes.

But remember not all local councils request borrowing above discounted level be used for home improvements. Due tot he amount of processing and time on behalf of the council, some stopped insisting on this a few years ago. So ask the local authority.

C&G traditionaly have been good with right to buys and so have Nationwide.

Remember the lender has to look at the building as security, however the council do basically hold a second charge on the discounted amount, as stated above, used o be 3yrs but now 5yrs ( however there are again a furthr excemptions on this, so check the local authority for info)

is a good move, shame the discounts are not as good anymore, used to be a lot more back in the day. Good old Mrs Thatcher, least she did some good things

deecy

We asked our housing association and they said they didn't mind how much we borrowed, ie 100% of the value or 100% of the cost - we'll check if they have a policy on home improvements.

We're really chuffed with the discount, it's the maximum our association allows.

Thanks for all the advice, that's excellent.

C&G are part of Lloyds TSB aren't they?

I bank with LLoyds and was told by the mortgage man they don't do 100% mortgages, does that mean Lloyds or C&G as well, I assume he would know about C&G?

housebuyer_abc

deecy wrote:

We asked our housing association and they said they didn't mind how much we borrowed, ie 100% of the value or 100% of the cost - we'll check if they have a policy on home improvements.

We're really chuffed with the discount, it's the maximum our association allows.

Thanks for all the advice, that's excellent.

C&G are part of Lloyds TSB aren't they?

I bank with LLoyds and was told by the mortgage man they don't do 100% mortgages, does that mean Lloyds or C&G as well, I assume he would know about C&G?

But if you've got a 30K 'deposit' you don't need a 100% mortgage

sciencegeek

Im a bit confused,
Im not being funny but could someone explain to me why a couple/family with an income of 50k are in a council house? Are they not meant for people with low incomes or special circumstances.

??