Advice on mortgage for right to buy council tenant

johncain25

Good morning,

Please could you advise me on the following: 

1. My council right-to-buy flat is valued at £187,600.

2. My discount is £104,000.

3. I am severely disabled so I receive the highest rate of PIPs and income-based ESA.

4. I have a live-in carer.

5. I will be 52 soon.

6. Can I get a mortgage where I repay the mortgage payments out of my benefits. I do not want an interest-only mortgage. I can easily repay the entire mortgage within 15 years as I spend very little every week and currently give the rest to charity.

Thank you very much in advance for your advice.

DE_612183

Do you have a deposit as well?

If so how much?

marcia_

 Hard to see you being given a mortgage with only benefit income. Its not classed as guaranteed income because your circumstances or the Law could change and you would be left unable to pay your mortgage. 

whizzywoo

DE_612183 said:

Do you have a deposit as well?

If so how much?

I would have thought that the Right To Buy discount would count as deposit?

ACG

Some lenders do allow benefit only income but very very few. The benefits they allow and the percentages they accept can vary so it could make affordability tricky. Its probably one for a broker really but there could be options. 

@DE_612183 most lenders accept the discount as a deposit. Although in this case the only lender I know of that accepts benefit only income would also need a minimum 5% deposit in addition to the discount. 

Edi81

Have you looked into how much the service charges for a flat will be? Also, if works on the building are approved by the council you will need to pay your share. 

johncain25

Good afternoon all and thank you all very much for your helpful comments.

Edi81, the service charge for block repairs and insurance is around  £600/year with the council stating there are no planned major works in next 5 years. It's a block of four flats and the entire roof was replaced 8 years ago.


ACG and DE_612183, do you know the names of any potential brokers or lenders you could suggest to me?  

whizzywoo, I'm counting the RTB discount as a deposit. So I would need an around 85K mortgage. 

Thanks again in advance for any more helpful input. 

ACG

johncain25 said:

Good afternoon all and thank you all very much for your helpful comments.

Edi81, the service charge for block repairs and insurance is around  £600/year with the council stating there are no planned major works in next 5 years. It's a block of four flats and the entire roof was replaced 8 years ago.


ACG and DE_612183, do you know the names of any potential brokers or lenders you could suggest to me?  

whizzywoo, I'm counting the RTB discount as a deposit. So I would need an around 85K mortgage. 

Thanks again in advance for any more helpful input. 

I think you will need to also put in £4,250 (5%) yourself. If thats not possible I dont know any lenders available. 
How many brokers have you spoken to? 

johncain25

ACG, thank you very much for your helpful advice.

I have a slight correction to make:

1. the property is valued exactly at 190K.
2. the charge is have to pay is £87,600 (Amount of Discount (Limited to maximum) £ 102,400). I applied to buy the property before the government changed the discount amount.
3. I have savings in an instant-access ISA of £3,600, which could be put towards a deposit
4. a friend is offering to put up £900 towards purchase price, so I would have £4,500 as a deposit.
5. I have not contacted any broker yet, could you advice how this is done.

Thank in advance you for your helpful advice.  

ACG

Im not sure about the gift from a friend - most lenders need it to be a relative. 
But I think you just need to look on google for a local broker really. You could try one of the larger firms like L&C but I think generally speaking you get a better service from smaller more local firms. 

LoopyLoops

johncain25 said:

ACG, thank you very much for your helpful advice.

I have a slight correction to make:

5. I have not contacted any broker yet, could you advice how this is done.

Thank in advance you for your helpful advice.  

When we needed to find a broker we used a local group on social media and asked for recommendations, gave us a starting point.  I also checked the company’s reviews via the internet.  I had a chat with my short list and went with the one I felt had the best understanding of our situation (which is a little quirky).  Hope that helps!