Council right to buy and mortgage

IPIP

Hi all

So I currently live in a council maisonette and have been for the past 13 years. I had a succession to the property from my late mother and have officially been the named tenent for the past 5 years.

I live in London and now that I have a stable income from my employer of under 1 year, I am considering to persue this scheme.

I did also work for another employer for under a year before I left and prior to this, I was self employed.

It means from the quote I have been given from the council <£100k, I can continue to pay for a mortgage which is almost as similar to the rent amount I pay anyway.

The only issue is, I have stabilized my finances for the past year and I am progressing to clear my debt (mainly utility bills) but my credit rate is terribly poor. It is about 264/999 on experian. I managed to get a loan on a car from Car Giant (19.9%APRI) which means my credit rating must have at least been usable.

I haven't yet contanted anyone for a martgage application but what are the chances of someone with poor credit history being accepted?

My gross income is £27k and my partner is currently on maternity and hers is ~£12k. Both of our credit is alike and we're working on improving this. Her's has gone up for using and mainting her Argos card and credits.

Any tips, ideas or any similar success stories amongs you?

Thanks

kingstreet

Right To Buy and adverse credit really don't mix.

Consult an independent broker to establish your options.

BTW ignore the "score" as it's nonsense. Lenders want to know what you had and when you had it, such as default, mail order, 01/01/2013, £643, satisfied 01/06/2014.

Your credit file is what the broker will want to see to be able to compare the data to lender criteria.

Cakeguts

You might also want to look into the cost of any repairs that are coming up. Council rent covers repairs to the property. If you own it you have to pay for the repairs. Sometimes these can be very expensive. This is why buying a council property is not always a good idea. The mortgage cost and the rent my be about the same cost but you will have to save all the time in case you have to pay for an unexpected repair. If you do not keep up the mortgage repayments you will lose your home so it is very important to consider whether this is a good idea. As it stands you can stay there for your whole life and if you have job problems you can claim benefits. There are no benefits that pay a mortgage if you are not working. They may only pay mortgage interest. Owning a property has far more risks than a lot of people realise. You will need to find out how much the service charge is likely to be and if it is likely to increase. I am concerned that your income is low for London and if you lose this home it will be extremely difficult for you to find anything else that you could afford. What this means is that losing your secure tenancy is extremely risky for you.

marksoton

With those income levels,in London with adverse credit you'd be mad to give up the current tenancy.

And that's before you factor in any excessive service charges round the corner.

teddysmum

Also, if the maisonette is the type that a relative of mine once rented,it is a sort of two storey flat, so this could have expenses for whole building facelifts ,on top of normal maintenance costs.

[Deleted User]

Remember you will need to have a deposit and be able to cover legal fees.

I'd advise waiting for a couple of years, use that time to save, get your debts sorted and credit rating up. And absorb the costs of having/covering the costs of a little one.

I doubt at the moment you'd be able to get a mortgage. You're still in the 'sorting out' stage of your finances rather than financially stable, which you should be.

TheGardener

deannatrois wrote: »

Remember you will need to have a deposit and be able to cover legal fees.

I understood the tenants 33% discount would be sufficient for a deposit?

OP - Go and see a 'whole of the market' mortgage broker and see if they can find you a deal worth having.
In the meantime clean up your credit file (there is a good guide to this in on the Bankruptcy forum board) and spend a lot of time and effort improving your rating. I know everyone says they are irrelevant but a good rating can really help.

Pixie5740

How can a credit rating help when no lender uses the credit ratings generated by the credit reference agencies, and the credit reference agencies don't lend money?

The RTB discount may or may not be sufficient for the deposit.

TheGardener

Pixie5740 wrote: »

How can a credit rating help when no lender uses the credit ratings generated by the credit reference agencies...

So explain to me why CRA's exist - and why a bad credit rating affects your ability to get credit? I'm happy to stand corrected.

Pixie5740

Lenders use your credit history (how you've handled credit in the past) help by the credit reference agencies to help determine how much of a risk you will be. However, they categorically do not use the credit scores/ratings made up by the CRA. You do not have a universal credit rating, every lender will view you differently.

The scores are just a marketing tool used by the CRA to get people to pay for subscriptions so that they can marvel at their score.

TheGardener

Ok - that's kinda what I said - I didn't say 'score' - I said 'rating' and what I was referring to was making sure the CRAs have the correct information (no financial associations with an ex partner who has been done for fraud - having up to date electoral role details etc etc) and correct/improve poor histories - as a way of improving your file - sorry I should have used the word 'history' for clarity.