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Under the government’s Right to Buy scheme, eligible tenants have the opportunity to become homeowners by buying the property they currently rent. That means instead of paying rent to a landlord, you will instead make mortgage payments to a lender. But which lenders offer mortgages on Right to Buy properties? And what is the best way to approach them?
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Which lenders offer Right to Buy mortgages?
Some lenders advertise ‘Right to Buy’ mortgages tailored specifically to this type of purchase; others will consider each mortgage application, including Right to Buy, on a case-by-case basis. In either event, if the lender’s criteria is met, they will look to agree the mortgage.
Some Right to Buy mortgage lenders will consider lending more than the discounted purchase price, in order to allow for home improvements to be made – so if (for example) your kitchen or bathroom need updating, you could look at borrowing additional funds towards this.
One thing to bear in mind, however, is that if you approach a lender direct, they can only discuss their own mortgage products with you; you will not therefore get an idea of the market as a whole. While you might by chance approach the lender offering the best deal for you, it is possible there may be better offers elsewhere.
Will I need a deposit?
With Right to Buy you do not always need a deposit; many lenders (although not all) accept the Right to Buy discount in place of one.
You will still have to budget for other costs, however, including survey fees, solicitors and, depending on the purchase price, stamp duty.
Am I likely to be accepted for a Right to Buy mortgage?
There are a number of things that are taken into account by lenders when they assess a mortgage application, including household income and expenditure for affordability, and whether the applicant has an acceptable credit profile.
To ensure you are considering all your potential options when looking for a Right to Buy mortgage it is best to seek advice from an experienced mortgage broker.
Some lenders offer various sorts of incentives or rewards to attract would-be borrowers to their mortgage deals. These can take the form of either straightforward cashback payments, or payment towards a particular fee or expense – for example a free valuation, or paying a portion of the property’s Stamp Duty.
This type of reward can be attractive, but always consider the bigger picture in terms of the overall product cost – a product with a £1,000 cashback incentive may not be such a good deal if there is another product available that would save you more than that in your mortgage payments over the product term.
Ask the experts
At Just Mortgage Brokers, we have a specialist team that works hard to help all our clients secure the best possible mortgage. With unlimited access to the market and exclusive rates that are not available on the high street, we will endeavour to find you the best deal.
Get in touch today for free initial advice and no-obligation quotes from our team of experienced mortgage brokers.