Right to Buy

jpcamps

Hi All,

My mother lives in a Housing Association house and we think she would be eligible to purchase the house at a substantial discount, as part of the Right to Buy scheme. The problem is, she wouldn't be able to afford the payments on the subsequent mortgage that she would need to take out to buy it.

Therefore, one suggestion that was put forward was that we applied for a joint mortgage, between myself, my sister and my mum, in order to make it more affordable her.

I have spoken with an advisor at the Right to Buy scheme and they mentioned that there is no stipulation from their end that says that anybody who applies for the mortgage must live in the house at the time. What the lady did say though, was that myself and my sister could not put our names on the right to buy application as neither of us have lived their in previous 12 months and also that a mortgage company can turn the mortgage application down if the names of all the mortgage applicants aren't on the right to buy application. However, she couldn't confirm whether this was all mortgage companies who did this or just a select few.

Does anybody know (or have any experience) whether a mortgage company would just plain refuse to lend money in this situation or whether some have managed to get a mortgage with people who aren't on the Right to Buy application.

Thanks in advance for any help.

Regards
Joel

Mojisola

jpcamps wrote: »

My mother lives in a Housing Association house and we think she would be eligible to purchase the house at a substantial discount, as part of the Right to Buy scheme.

The problem is, she wouldn't be able to afford the payments on the subsequent mortgage that she would need to take out to buy it.

Is buying the house in her best interests?

She has a secure tenancy, can get help towards paying the rent if her income is low and doesn't need to worry about finding the money for repairs and maintenance to the property.

Pixie5740

Does your mum want to give up her secure tenancy? What benefit would that be to her? Presumably she can afford the rent at the moment so why would she want to get a mortgage that she would have joint and several liability for is she can't afford the mortgage repayments? That makes no sense.

Did the RTB adviser say that your mother would still get the discount if she applied for a joint mortgage with two people who do not live in the property with her?

jpcamps

Well, my Mum who has been a single mother since she was young with not much help from our Dad at all and she has always felt that she was a failure etc (obviously, she isn't!) and it would give her a sense of pride in the fact that she actually owns a house rather than just rents from a HA. This wasn't meant to sound like a sob story, if people think that's what the above is!

The only reason that we myself and my sister would be involved would be to help Mum be able to afford it (I'm sure the cynical among you would think my sister and I were in it for personal gain, but we wouldn't be, but it would be a secondary bonus for doing it!).

With regards to security / being able to afford it, as the mortgage would be joint, then all three of us would be responsible for mortgage payments, therefore, my Mum's would most likely be lower than her current rent payments and we would also jointly be responsible for any repairs etc. So, with only paying a third of repair bills and most likely having a lower monthly payment than her current rent, it may actually be worthwhile.

The RTB advisor mentioned that they had no stipulation on this, basically, they don't care who funds the purchase on top of the applicant. Therefore, we would still be eligible for a discount.

We may not even do it, but it was just a conversation we all had as a family and seemed like it could be a good idea.

Thanks for your replies.

Gigervamp

Are you or your sister married? If so, and you get divorced, that third share will become part of the marital assets.

Mojisola

Gigervamp wrote: »

Are you or your sister married? If so, and you get divorced, that third share will become part of the marital assets.

And if either of you need to claim means tested benefits they may be restricted because you have capital in a house other than the one you live in.

I still can't see how Mum's situation is improved - having a sense of pride in herself could be achieved in many ways without compromising the security of her home.

fairy_lights

Other than a sense of pride, I can't see any benefit to your mother in doing this.

McKneff

Would capital gainst tax come into it at some time.


Can you actually get a mortgage for a house you don't live in.


Just curious......