right to buy confusion

FBaby

Why do you want to sell it. Seems you were happy to live in it for many years, so why would it be that it would become not good enough once you own it?

Sounds like you can only afford it if you don't pay the capital, ie. rent it.

AdrianC

daffas6688 wrote: »

After waitng a year from enquiry to council to finally being given a price for my property I am now in the need to get a mortgage. I have na large discount of £93,0000.

How much would you need the mortgage for?
What's your income?

As I am now 54

So you have a little over a decade until your state retirement age. What will your income be after that?

The payments would be simliar to my rent payments.

How about maintenance on the property? Can you afford that? Is it a flat or a house?

I was told that I had to have assetts to cover the loan to the value of the loan.

Interest-only mortgages normally go alongside a repayment vehicle - it always used to be an "endowment policy", basically a savings account that was targetted at being worth the same as the amount of the mortgage at the end of the mortgage. However, you may have heard that they frequently weren't - leaving people with shortfalls of tens of thousands to fund. This is one reason why they've heavily fallen out of favour. Interest-only loans are now pretty much dead outside of buy-to-let, where the borrower already owns their own home.

Pixie5740

daffas6688 wrote: »

Are all banks like this?

Yes, most if not all, mortgage lenders are like this. The mortgage market changed a lot after 2008 and again in 2014 with the Mortgage Market Review came in. There are some lenders out there offering interest only mortgage but to qualify you need a repayment vehicle (not the property you are buying) and/or a £100k pa income.

Rather than taking mortgage advice from Dave next door it might be prudent to get mortgage advice from an independent mortgage broker specifically one who specialise in RTB mortgages.

kingstreet

A lender offering interest-only mortgages bases affordability on the capital and interest equivalent, so you need to be able to afford it on repayment, even if you can get interest-only.

teddysmum

Cakeguts wrote: »

If anything happens and you lose this house the council will not rehouse you.

My son and partner, who had two young children found it difficult to get council housing (were 'lucky' that a house, in a not very pleasant area came up ) after they were facing homelessness, because their private landlord , broke health and safety rules so was no longer allowed to rent the property out. This was not in a highly populated area like London and families have priority over healthy single people.

Hoploz

I'm intrigued how your plan is to buy the house, then move after 5 years and give the bank their money back.

How are you financing the home you'll be in when you've moved and given the money back? You'll be 5 years older, closer to retirement.

teddysmum

Hoploz wrote: »

I'm intrigued how your plan is to buy the house, then move after 5 years and give the bank their money back.

How are you financing the home you'll be in when you've moved and given the money back? You'll be 5 years older, closer to retirement.

Using the profit from selling at full market value, which will hopefully have increased (so at least the £93000 discount) to buy in a cheaper area ? That would buy a neat terrace or small semi in some regions.

daffas6688

Think I have opened a can of worms here. I really don't want to be stuck in London area when I retire. Unfortunately it isn't always a point of being happy in the place you live as you can't actually choose your council property. My boyfriend has his own one bedroom place too that he has nearly finished buying. Our places are not very large and we hoped to marry and move well away to a property a bit bigger to accommodate both our stuff . Maybe a pipe dream but we all dream . I will contact a broker as have some extra cash to put forward to lower what I borrow.

Lioness_Twinkletoes

daffas6688 wrote: »

Unfortunately it isn't always a point of being happy in the place you live as you can't actually choose your council property.

Yes, you can. Mutual exchanges are an excellent way of exchanging your current home for one in another area. You can even upsize or downsize.

leespot

daffas6688 wrote: »

Think I have opened a can of worms here. I really don't want to be stuck in London area when I retire. Unfortunately it isn't always a point of being happy in the place you live as you can't actually choose your council property. My boyfriend has his own one bedroom place too that he has nearly finished buying. Our places are not very large and we hoped to marry and move well away to a property a bit bigger to accommodate both our stuff . Maybe a pipe dream but we all dream . I will contact a broker as have some extra cash to put forward to lower what I borrow.

You haven't opened a can of worms. Your post is asking the best possible way to profit from a scheme that is not intended for people to profit from in the way you have suggested - and that will receive a whole number of mixed responses.