right to buy help!

fordiemufc

hi all,

looking for some advice on a right to buy mortgage.

me and my misses are looking at buying our council home that she has lived in since 1993/94 and me since about 98, so if at all possible to help me with some questions that i have?.

1.solicitor and surveyor fees can these be added to the mortgage or is it simply just pay upfront?.

2.getting extra money for home improvements added to mortgage ie a home extension?.

3.high street bank or broker,do brokers charge a fee?if so is that an upfront cost or is added to the mortgage?.

also like to add that we have really good credit no missed payment or ccjs no rent arrers.

my aim is to know what to expect when i set the ball rolling as we are keen to be home owners before the year is out.

thanks matt.

ACG

1. You might find surveyor fees are free/included. Solicitor fees are unlikely to be included. You will probably need about £300 on offer of a mortgage to pay for the searches and maybe another £700-900 on completion for the rest of the legal work, but this will vary from solicitor to solicitor and the details (ie leasehold/freehold). 
2. Will limit your options, there are only a couple of lenders who can offer it and there are certain restrictions in terms of how much you you can get. 
3. Some brokers are fee free, others charge. The ones who charge may charge on application/offer/completion. I dont think many lenders allow brokers to add their fees to the mortgage anymore, I can only think of one and you wouldnt want their rates anyway (they start at 6.5%ish). 

Obviously I do not know your personal circumstances, but are you sure buying is the right thing to do? If you are looking at adding everything to the mortgage what happens if a big job crops up? As it stands the council pay for it, going forward you would have to. I only mention it as we would have to have that conversation anyway so always best to raise it - I dont need an answer btw, just posting it so you can have a think about it. 

fordiemufc

ACG said:

1. You might find surveyor fees are free/included. Solicitor fees are unlikely to be included. You will probably need about £300 on offer of a mortgage to pay for the searches and maybe another £700-900 on completion for the rest of the legal work, but this will vary from solicitor to solicitor and the details (ie leasehold/freehold). 
2. Will limit your options, there are only a couple of lenders who can offer it and there are certain restrictions in terms of how much you you can get. 
3. Some brokers are fee free, others charge. The ones who charge may charge on application/offer/completion. I dont think many lenders allow brokers to add their fees to the mortgage anymore, I can only think of one and you wouldnt want their rates anyway (they start at 6.5%ish). 

Obviously I do not know your personal circumstances, but are you sure buying is the right thing to do? If you are looking at adding everything to the mortgage what happens if a big job crops up? As it stands the council pay for it, going forward you would have to. I only mention it as we would have to have that conversation anyway so always best to raise it - I dont need an answer btw, just posting it so you can have a think about it. 

thanks for the rply

so do you think £1500 would a be a reasonable amount for the fees?.

and yes its somethink i need to do i am 40 now and the wife 46 and i need to make sure our daughter is right when the time comes if you get me, i am not really that fussed on extra money just somethink i was curious about.

my house is well looked after aswell new roof,kitchen bathroom boiler all in the last 3-4 years not to mention the £1000s we have put in to it like marble fire surrounds driveways ect. we are very house proud .

ACG

£1500 should be plenty. 

strawb_shortcake

Only going to add that RTB is very slow, when we bought ours we started in May and completed end of January, with the current climate I imagine the process to be slower. 
Also definitely reccomend a broker not all lenders will accept the discount as deposit, Barclays for instance wanted £10k deposit. 
Getting additional funds might be difficult for the first 5 years as the council or HA have a charge on the property.
Good luck!

fordiemufc

annabanana82 said:

Only going to add that RTB is very slow, when we bought ours we started in May and completed end of January, with the current climate I imagine the process to be slower. 
Also definitely reccomend a broker not all lenders will accept the discount as deposit, Barclays for instance wanted £10k deposit. 
Getting additional funds might be difficult for the first 5 years as the council or HA have a charge on the property.
Good luck!

sorry but what do you mean by charge? its all new to me so any info is greatful

strawb_shortcake

The council or HA, have a financial interest in the property for the first 5 years you own the property, and should you sell or worse case scenario be repossessed they get a proportion of the discount you were given.
This reduces by 20% a year, but is in line with increases or decreases to the value of your property, rather than the cost of the discount. 
I hope that makes sense? 
Additionally, if you remortgage within 5 years of owning it, you'll have to get a deed of postponement to certify that the council will not call in their "dues" this was a right pain to sort as no one knew what it was, and incurred some additional costs, not huge but still a nuisance.

fordiemufc

annabanana82 said:

The council or HA, have a financial interest in the property for the first 5 years you own the property, and should you sell or worse case scenario be repossessed they get a proportion of the discount you were given.
This reduces by 20% a year, but is in line with increases or decreases to the value of your property, rather than the cost of the discount. 
I hope that makes sense? 
Additionally, if you remortgage within 5 years of owning it, you'll have to get a deed of postponement to certify that the council will not call in their "dues" this was a right pain to sort as no one knew what it was, and incurred some additional costs, not huge but still a nuisance.

i get you,i knew that if i sold in the first few years i would have to give a % back i did not know that they still had a financial interest in the property mind...suppose it makes sense tho.

strawb_shortcake

fordiemufc said:

annabanana82 said:

The council or HA, have a financial interest in the property for the first 5 years you own the property, and should you sell or worse case scenario be repossessed they get a proportion of the discount you were given.
This reduces by 20% a year, but is in line with increases or decreases to the value of your property, rather than the cost of the discount. 
I hope that makes sense? 
Additionally, if you remortgage within 5 years of owning it, you'll have to get a deed of postponement to certify that the council will not call in their "dues" this was a right pain to sort as no one knew what it was, and incurred some additional costs, not huge but still a nuisance.

i get you,i knew that if i sold in the first few years i would have to give a % back i did not know that they still had a financial interest in the property mind...suppose it makes sense tho.

Only via the charge as that's how they'd get their money back if need be. I think if we sell within the 5-10 years I think they have to be offered the house first, presumably at full market value.

CreditCardJunkie

Hi Matt, we bought our council house last Feb. 
In answer to your questions:
1. Solicitor fees we had to pay ourselves, our council paid for their own surveyor and we were happy enough with that. Our fees were around 1k. We live in Northern Ireland so prices are likely cheaper. 
2. We were initially told yes we could have extra money on top for a new bathroom. We were told we could have up to 8k and we requested 3. On the finalisation we were told we couldn't have it. The reason for it is, as others have said, if you sell within a certain time frame you have to pay back the discount. Had we taken a loan out and sold early there might not be enough from the sale to pay back the discount to the council. 
3. I think it depends, we didn't have any fees. We used Ulster Bank who were happy to take our 'equity' as a deposit. 

Just from my own experience I would say buy the house if its suitable for you. We bought our 2 bedroom and now have another 4 years to wait before we can sell without repaying discount. We've since had a baby and rapidly feel like the house is too small for us. We feel that we couldn't have a second child until we have another home. On top of this, our boiler broke down in Jan we had to pay just over 2k for a new one. This put us under financial pressure as we didn't have the money for it, and I'm currently on statutory maternity leave so my income is greatly reduced. Literally 3 days later all the council properties around us were getting theirs replaced. 
I'm not sure that for us,  buying this house was the best option. 

CreditCardJunkie

Also it does take a really long time, we put the application through in August and completion was Feb.