First time buyer - Right to Buy

davidmcn

glentoran99 wrote: »

why would the council have a charge on it?

To secure the obligation on the buyer to repay the discount if they sell within x years.

Mojisola

Cakeguts wrote: »

The first thing you need to understand is that if you don't pay a mortgage you lose your home. Buying is not like renting. If you buy and lose your job if you do not have saving to cover the mortgage payments when you are out of work benefits will not pay them for you. The most you can expect is to have the interest paid.

And to add to this advice - once you buy the property, you are responsible for all the maintenance and repair costs. If the roof starts leaking or the boiler breaks down, you will have to find the money to sort them out - when you're renting, it's the council's problem.

Lioness_Twinkletoes

Further to all the advice given - if it's a leasehold property you'll be responsible for paying a proportion of the costs of any major works. This can be many, many thousands.

gingercordial

OP, this is a really stupid idea if you are in the position of not being able to afford your existing credit card repayments plus the mortgage.

At the moment if you can't afford your repayments that's an issue with your CC providers but will not cause you any housing issues because you have a secure council tenancy and you do not have an asset for your CC providers to seize.

If you buy the house, can't adjust the CC repayments because no-one will lend you that much for consolidation on top of a new mortgage, and can't afford those payments plus the mortgage even at today's interest rates, either you'll fail to make the mortgage payments (ie repossession) or run the risk of ending up bankrupt (also repossession, eventually). That's even without the risk that major repairs will suddenly be needed and you are responsible. Your home is now seriously at risk - especially if interest rates go up, which they'll have to do eventually! It would be madness to enter into a mortgage which you already know you can't afford under present circumstances, throwing away a secure tenancy in the process.

Why don't you wait, focus on repaying the CC debt, and then look at buying once that is clear, if you still want to and still think it's a good idea? Presumably the RTB discount isn't going away for you, so wait and do it later.

AdrianC

Jazzyb75 wrote: »

I am currently a council tenant but looking to buy my first property using the right to buy scheme. The property is worth £270k, however I get a discount of £77k (which I will use as the deposit). Leaving me to get a mortgage of £193k.

My current rent is low and the montly amount would double for a mortgage payment.

I have £34k of debt on credit cards (all on 0%) and a loan from the family bank of around £5k.

In order to afford the higher monthly mortgage payments I will need to consolidate the credit card debt.

Q. Could I take out a secured loan (on the property) quickly after my mortgage to get the best rates?

Jazzyb75 wrote: »

Yes - been approved. Got a decent credit rating and good salary in a long term job.

If you've got a "good salary" - good enough to get a £193k mortgage, so somewhere north of £50k? - then how come you owe £40k, despite paying "low rent"?

You need to get your finances in order BEFORE thinking of buying.

tim123456789

Bogalot wrote: »

Any reason why you cannot buy somewhere within your means on the open market.

because he wont make a 100 grand windfall profit on an open market property


tim

kingstreet

Jazzyb75 wrote: »

Q. Could I take out a secured loan (on the property) quickly after my mortgage to get the best rates?

No. You cannot borrow into equity you do not yet own.

You would have to wait for the Council's pre-emption period to end in five years, as the chances of them agreeing to it or in the case of a remortgage granting you the necessary deed of postponement while within it are slim and none.

csgohan4

OP you cannot use the discount as a deposit, in effect you have NO deposit and thinking ahead of yourself. Stick the secured tenancy and concentrate on your debts, Stepchange are quite helpful or the CAB.

Just because you have RTb, doesn't always mean it is the right time to use

Pixie5740

You can use the RTB discount as a deposit. What you can't do is then borrow against that equity for other purposes such as debt consolidation because until that 5 years is up the equity still belongs to the council.

kingstreet

csgohan4 wrote: »

OP you cannot use the discount as a deposit, in effect you have NO deposit and thinking ahead of yourself. Stick the secured tenancy and concentrate on your debts, Stepchange are quite helpful or the CAB.

Just because you have RTb, doesn't always mean it is the right time to use

There are still RTB lenders offering 100% of the discounted purchase price AFAIK.