Right to Buy to Permitted Developments to Defaults and everything in between!

GrumpyDil

So if you can't settle the defaulted amounts in one go how long would it take to clear them based on what you could afford to pay each month.

I'm just wondering of delaying the purchase for a few months until ypu are able to clear them would give you more mortgage options as I would expect defaulted settled loans would look better than defaulted unsettled at the moment.

elaine77_04

babyblade41 wrote: »

I think that what people aren't understanding is that a deposit shows commitment and sacrificing luxuries to make that commitment

A good salary should allow even a small amount to be saved...
You seem to be contradicting everything and even is the true reality is not what you'd like to hear it's better to know than to go in blindly.
???

As explained across many of my posts, I did have savings which would have amounted to a deposit (but certainly not a 42% deposit) but I used a lot of these savings when I was almost made redundant and had to take a lower paid role for a period of time. I have saved since then and so have money saved to cover costs, expenses etc.. but, again, not an amount that equates to a 42% deposit which is what we are entitled to under RTB.

I’m not aware I have contradicted myself, I’ve been saying the same thing across most posts. The issue is not affordability or anything like that, it is regarding the defaults and the best course of action under those circumstances balanced with the fact that a mortgage wouldn’t cost anymore than my rent does which makes is strange that people seem to be suggesting I can’t afford a mortgage but can afford the rent?

If anything is contradictory it is some of the responses I have had where people are suggesting on the one hand that I can’t afford to mortgage my house under RTB, but I can and should afford to go and get a mortgage and a house on the open market?

elaine77_04

GrumpyDil wrote: »

So if you can't settle the defaulted amounts in one go how long would it take to clear them based on what you could afford to pay each month.

I'm just wondering of delaying the purchase for a few months until ypu are able to clear them would give you more mortgage options as I would expect defaulted settled loans would look better than defaulted unsettled at the moment.

One of them (the largest) is a Credit Card with a balance of £12k which would likely take the same amount of time as it would take for the default to drop off anyway and so the IFA I spoke to advised me to take this into consideration when considering whether it is worth paying it or just taking the hit on the default as the penalty period will be the same...

The other could probably be cleared within 2 years but, again, not worth paying one without the other as one default would still remain and paying additional payments would alter affordability. Again, I did discuss it with an IFA and have tried to look into this as much as I can.

csgohan4

so you have 12k of debt plus 5K of used credit??
that's alot of debt for a 'good' salary
By all means try and buy your house, but servicing this amount of debt maybe an issue for some lenders

How much deposit you have or your going to keep that a secret as well

elaine77_04

csgohan4 wrote: »

so you have 12k of debt plus 5K of used credit??
that's alot of debt for a 'good' salary Which assuming would be around 40-50K if the mortgage calculator says you can afford 200k house before debt

By all means try and buy your house, but servicing this amount of debt maybe an issue for some lenders

How much deposit you have or your going to keep that a secret as well

The £5k of used credit consists of only £2.5k credit card balances; the other £2.5k is just things like utilities accounts; broadband packages and mobile phone contracts etc so just monthly bills rather than actual credit debts being paid off on top of monthly bills.

I could have cleared the credit cards by now but I wanted to keep them going as ongoing credit accounts that were fully paid and up to date as I figured this would help my credit rating once the defaults are sorted because it would still show an ongoing history of credit accounts being up to date. Basically to keep my credit rating going in the background for when the defaults are sorted.

We don’t have a “deposit” as such. We have savings which would be enough to cover the additional expenses of buying a property but on the open market would probably only equate to a 5-10% deposit depending on the size of house we bought and so it makes no financial sense to mortgage ourselves to the hilt on a 90-95% mortgage when we could use RTB and be entitled to a 42% discount due to all of the rent we have been paying for the past decade.

AdrianC

elaine77_04 wrote: »

Nobody mentioned anyone living hand-to-mouth.

Ah, my apologies.

I assumed you were meaning your own situation with...

elaine77_04 wrote: »

...They earn plenty on a monthly basis but are unable to save the significant amounts for a bulk payment of a deposit all up front due to the cost of living day-to-day.

diggingdude

It's unlikely I would have thought that they would lend you enough on top to do the work as there is a chance council could have to have money back if you sold early and they would be left out of pocket considering your credit history and lack of contribution towards deposit.
If you can't afford to do work, why not delay buying and either save for work or pay off your debts to begin with? Seems crazy to buy a house you admit t the moment is too small

Marvel1

elaine77_04 wrote: »

I’m also interested to know....if you don’t think people on ‘good salaries’ should benefit from RTB then what kinds of people do you think should be benefitting from it? Without a decent salary how would you get any mortgage at all?

The sooner they get rid of RTB the better, whoever wishes to do in their policy gets my vote - reasons given by Cakeguts.

elaine77_04

Marvel1 wrote: »

The sooner they get rid of RTB the better, whoever wishes to do in their policy gets my vote - reasons given by Cakeguts.

Appreciate your opinion but, the point stands that the Council’s failure to build new social housing is not the fault of tenants whose only chance at getting onto the property ladder is to buy the property they’ve paid rent on for years and years.

The Council are selling land and handing out planning permission hand over fist for private developers to build tiny minimum-standard homes all squashed onto the smallest amount of land possible and make huge profits from private sales. If they built social housing instead, even a fraction of the amount of private homes, there wouldn’t be a shortage of social housing and people would find home ownership a whole lot more affordable.

The reason they are not doing this? Is because the government do not want people to live in social housing because social housing means eternal entitlement to housing benefit and housing benefit is the biggest cost to the public benefits purse in this country.

You’re directing your discord at the wrong people.

ACG

The RTB is attractive to some lenders. There are lenders who will not lend on RTB properties.

The problem is more you as an applicant. You have no history of saving a deposit and you have defaults. On paper that is not a great mix. Appreciate there is far more to it than that (there usually is), but it is not just going to be a piece of cake because you have a huge deposit.

Taken from Barclays website:

Our main criteria for RTB are:

We can lend up to 95% of the discounted price as long as this does not exceed 80% of the valuers' open market valuation – eg, if your client’s property is valued at £100,000 and the Local Authority are offering a discount of £35,000, the maximum loan we could consider would be £61,700 (95% of £65,000)
Enhanced income multiples can be applied where an appropriate credit score is achieved
Only the individual(s) entitled to the RTB may apply
Remortgages will be considered subject to certain criteria. Contact our IBC for guidance

Nationwide criteria for RTBs

Right to Buy Purchase
We can lend up to 100% of the discounted purchase price. We can also lend additional amounts for home improvements and legal fees.

I am not suggesting either of these lenders are right for you, I am just showing how criteria can vary. But what the nationwide website does not say is how much over and above the discounted purchase price you can go. I am sure there is a limit of maybe 10%.

Obviously you also have to find a lender who will accept the defaults and I am not sure Nationwide or Barclays are the ones for that - happy to be proven wrong however.