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The Right to Buy Scheme is only available for council and housing association tenants that have occupied their property for a period of two years or more.
The scheme set up by the government in 1980 aspired to help those who cannot afford to get onto the property ladder. Today, it has helped thousands of council tenants onto the property ladder without the requirement of finding a deposit.
If you are thinking of purchasing your council house, you will first have to contact them so that they can arrange a survey to be carried out. Should the survey satisfactory, then the council can determine how much the property is worth and what your discount entitlement is. This could range anything from 25 – 65% Loans to Value of the Property. The amount of years you have resided in the property and how many years overall you have been a local authority tenant will determine the amount of discount you will receive.
Once you have received your discounted papers, you will then have to search for a Right To Buy Mortgage Lender. The majority of Mortgage lenders, including high street banks lend on the Right to Buy Scheme as long as you satisfy their lending criteria. You could also borrow up to 95% Loan to Value of the property, that will leave you enough ready cash for home improvements, a holiday or debt consolidation.
Due to the fact that your discount has given you some instant equity, you will not be required to pay a deposit; you will however have to pay legal fees and surveyors fees if applicable.
Mortgage lenders will generally take a rent reference for the past year from your local authority or housing association, so any missed rent payments should be mentioned to the mortgage lender in advance to save time, approaching a reputable broker could be the easier choice.
Sub Prime lenders will accept missed rent payments and some adverse credit such as defaults and CCJ’S. They may also lend to self-employed people with no accounts or proof of income. Interest rates will inevitably be a little higher that a conforming bank.
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