Right To Buy Mortgages

omx

Hi, I am new and its my first post :wave:

I have looked around the web and cannot find much in the way of specific information so I thought I would post here.

Seen the discounts and I am currently looking at the possibilities of buying our home from the council.

Could someone tell me what advantages there are with a Right To Buy Mortgage. Are they typically mortgages with low deposits or are they necessary under the scheme. I guess what I am asking is it possible to purchase with another type of mortgage?

Appreciate your input

Rgs OMX

kingstreet

A right to buy mortgage is just like any other. You borrow money, you have the choice of fixed or variable rates. You can choose the term to suit you.

The discount is treated as your deposit, so you can borrow upto 100% of the discounted purchase price.

Make sure you select the products from the lender's list which allow right to buy.

omx

Excuse me if I am ignorant to these things. What about if I had a reasonable deposit already. Would I still be tied to a right to buy mortgage or could I get another type? Say for example a first time buyers, a self employed or perhaps an interest only mortgage. Wouldn't want to limit my choices when there might me a cheaper interest rate or a particular product more suitable to my individual needs.

kingstreet

The deposit isn't relevant.

Lenders have products which can be used for right to buy cases where no deposit is required. Some may allow borrowers to use standard purchase or FTB products, but TBH there normally isn't much to choose between them.

Paying a deposit on top may reduce the rate by improving the loan to value, but it also may not. Shortlist the products you like the look of on online comparison sites, then try them with and without a deposit to see if there's a difference.

There are no "self-employed" mortgage products. The subdivisions tend to be;-

FTB
Subsequent purchase
Remortgage.

With RTB falling under the heading of "purchase" in general.

Then these split further into variable (tracker and discount) and fixed/capped.

Repayment methods then fall into repayment, or interest-only, or a combination of the two, part & part, for those with an existing savings product which won't repay the whole loan.

Products are available to employees and the self-employed, subject to status in each case.

Mortgage Brain, one of the industry sourcing tools for brokers, suggests there are 482 products allowable for right to buy business, starting from 2.69%, so you aren't going to pay more because of the type of business you are looking to place.

bestgym

The level of discount that will be received will be calculated by the amount of years that they have been a public sector tenant up to defined limits set as maximum discounts for the local area. This means that you could get a discount of anywhere in between 32% and 70% off the market value which makes the Right to Buy scheme attractive to many people.

somethingcorporate

I didn't realise there were any IO options left..are there still some kicking about for primary home ownership?

kingstreet

MB comes up with 68 products for an RTB on IO with "Other" as the selected repayment vehicle. Whether that's reliable, or not, is another matter...