Right to buy advice and would we get a mortgage?

beep_beep

Hi,

Please don't take this post as me trying to take advantage of the right to buy scheme. I understand posts about right to buy can cause a huge divide on the morality and whether people on benefits should get preferential treatment getting on the property ladder. I can understand the stance people take about the subject, but I would sooner not have a is it right or wrong debate.

My mum and dad have lived at the house for 38 years, It has been a family home for 3 kids in this time (we had all moved out) My dad passed away in 2011 which caused my mental health to deteriorate rapidly and I have been sectioned twice in the last 4 years. On my latest relapse I was told by the crisis team I would be sectioned again if I didn't have a settled address and somebody who could care for me (making sure I take my medication, I don't drink excessively or try to kill myself, basically keep me safe) My mum said I can move back into her house.

When I moved my mum who is on pension credit knew that her entitlement to 100% housing benefit would change and we would have to pay some rent, we currently pay £90 per month to the council for rent. I have looked and my mum will qualify for the right to buy scheme and would be able to buy the house for £29k. I am pretty sure that she would not qualify for a mortgage due to age. I am currently on long term sick due to a personality disorder which has been diagnosed by a psychiatrist. I have never had any kind of loan, bank account or indeed any other kind of financial services so my credit rating would be pretty poor I think.

My mum asked for informal advice from her local bank Halifax and they have said if we got accepted and they could give no guarantees we would we are looking at £120 per month if we went for a 25 year mortgage or £177 montly fee for a 15 year mortgage, This is with £4000 deposit paid upfront. We currently pay £90 rent per month so it does seem wasted money when we could go buying the house for £120 a month.

What kind of info does the bank need if both my mum and I went in for a mortgage? I am sure the computer will say no (due to mums age and me having no credit rating) can this be over ridden by the banks? I mean my mums bank shows £90 being taken out monthly for rent and this has been for a over a year now. They must see that we could afford the amount per month they quoted?

Also a strange thing the bank said, Because my mum is on pension credit, the council would be obliged to pay the interest on the loan if we got into difficulty, that can't be right surely? I mean it is pretty disgraceful if it is true, and I could see why the subject of right to buy is a taboo subject for certain people.

Sorry for the long post!

Red-Squirrel_2

I can't see what benefit either of you would get from owning the house rather than continuing to live in it on a secure tenancy.

You'd pay more per month, you'd have much less security if you got into financial difficulties, you'd be responsible for all the maintenance costs, what's in it for you?

Even if you can get a mortgage without either of you working (which seems very unlikely) I don't think it would be a good idea for either of you. What makes you want to buy the place if you don't mind me asking?

Pixie5740

You'd really need to speak with a mortgage broker specialising in RTB but given that neither of you work I don't fancy your chances.

Who has the right to buy? Just your mother or both of you?

Why do you think it's disgraceful that councils sometimes end up paying people's mortgage interest? If a home owner gets made redundant they can apply to the council for Mortgage Interest Relief to tide them over until they get another job just in the same way a tenant could claim housing benefit.

beep_beep

Red-Squirrel wrote: »

I can't see what benefit either of you would get from owning the house rather than continuing to live in it on a secure tenancy.

You'd pay more per month, you'd have much less security if you got into financial difficulties, you'd be responsible for all the maintenance costs, what's in it for you?

Even if you can get a mortgage without either of you working (which seems very unlikely) I don't think it would be a good idea for either of you. What makes you want to buy the place if you don't mind me asking?

My mum is 67, I am 34 and we live in a 3 bed house. My mum and mental health team are worried what would happen to me if my mum ever passes away. It was the crisis team who suggested buying the property as it would only be £30 more we were paying each month with rent. Something that we can both manage.

I don't know, I just feel as a 34 year old male, I would have zero chance of council accommodation if the worst was ever to happen, The thought of living in a mental health institute long term fills me with fear, and the thought of living in a 1 bedroom flat swarmed with lots of people around my living space I know I would try to end my life.

EDIT : sorry that sounds very self centered, I don't mean to be honestly, It is just my moving back in with my mum this last year and a half has really given me a new chance to live independently and I am trying to hold onto that.

beep_beep

Pixie5740 wrote: »

You'd really need to speak with a mortgage broker specialising in RTB but given that neither of you work I don't fancy your chances.

Who has the right to buy? Just your mother or both of you?

Why do you think it's disgraceful that councils sometimes end up paying people's mortgage interest? If a home owner gets made redundant they can apply to the council for Mortgage Interest Relief to tide them over until they get another job just in the same way a tenant could claim housing benefit.

Both my mum and I have a right to buy, We are entitled to the full 70% discount. I dunno just feels like we are paying £90 per month which if we raise to £120 per month we would be buying the house outright.

No, No, No I didn't mean disgraceful that the council offer the service of Mortgage Interest Relief. Just that the Halifax said, as my mum gets Pension credit if we did take a mortgage out, the council will pay the interest for said mortgage, which if true is pretty poor form and if true I can see why people may get annoyed with the right to buy scheme. Apologies for giving that impression.

Tigsteroonie

If something happened to your Mum, could you afford the £120 yourself each month?

beep_beep

Tigsteroonie wrote: »

If something happened to your Mum, could you afford the £120 yourself each month?

It would be a struggle but I could just manage it. I am on ESA support group and long term sick, manly because of my personality disorder and hearing voices on occasions. I get £123 per week ESA and £100 PIP per week. Also I am sure that the council would help for a certain amount of time until I could figure things out?

If as things current things stand, and god forbid my mum ever left me, I would be homeless. The council would kick me out of a 3 bed property because I have only lived here for x amount of time. The prognosis of keeping things as is, is that I really struggle to see the future in a positive light, so much so that if my mum ever left me like my dad did I would end it if I had to be sectioned or moved into a overcrowded block of flats, no if's or but's I would need to leave.

Kittycat1981

If you are on the tenancy (which i assume you are to qualify for the RTB status) and its a secure tenancy then the council cannot throw you out. They can charge you bedroom tax for the 2x bedrooms not in use however.

beep_beep

Kittycat1981 wrote: »

If you are on the tenancy (which i assume you are to qualify for the RTB status) and its a secure tenancy then the council cannot throw you out. They can charge you bedroom tax for the 2x bedrooms not in use however.

Is that the case? I was told as I moved in with my mum recently I am only classed as a 'lodger' with the council and not a 'tenant' there is a big difference in the two apparently? I am unsure of the law and whether I would have a legal right to live their if my mum ever left me?

If as you say is correct I feel I could cover the bedrooms not in use, or maybe the council would offer a suitable alternative accommodation.

Marker_2

If you are a 'lodger' then you don't have the right to buy. If you are a tenant, as in you have signed the forms officially making you a joint tenant with your mum, then you do have the right to buy.

It sounds like you are not down as a joint tenant to me. I do think you will be in way over your head if you get a mortgage and you are having health problems that are affecting your ability to work.

If I was in your position, I would become a joint tenant first, so that if your mum does leave you, you have a secure roof over your head. And then when you are in a better position mentally and financially, look into buying the house again.

fairy_lights

If you bought the house how would you afford to pay for repairs? it might only be £30 a month more than you currently pay in rent, but what about buildings insurance, boiler cover etc.
I think it was pretty irresponsible of your crisis team to suggest you think about buying a house you wouldn't be able to afford to maintain.