Right-to-buy Mortgages are trending in the United Kingdom, with tenants highly interested in buying the property they live in rather than continue to pay rent forever. With so many applications, it is important to seek the aid of a mortgage advisor Manchester to access the best deals and have the best chances of getting the right mortgage for yourself.
What Are Right-To-Buy Mortgages?
Right-to-buy or RTB is a government scheme that allows tenants to buy the main residence they live in at a discounted price. Tenants from all over Manchester are getting the best deals for their next permanent home. Some of the deals do not ask for a deposit beforehand. If you share the home with somebody else, you can make a joint application for this government scheme.
Owning the place you already call home is a wonderful thought; that’s why RTB mortgages are a perfect way to have your dream home. You can apply whether you live in a house or a flat. The maximum discount you can get depends on factors like the UK zone you live in, how long you’ve been a tenant, whether you want to apply for a house or a flat, and whether you have a good credit score. A mortgage advisor Manchester can help you get a deal even if you don’t have a great credit score.
Eligibility Criteria for Right-To-Buy Mortgages
If you want to apply for an RTB mortgage, you have to meet certain requirements:
- Tenancy: You have to be a tenant in the place you want to acquire with the help of the Right-To-Buy scheme. If you do not meet this requirement, your application will certainly be denied. In addition, how long you’ve been a tenant will influence the discount, with the recommended tenancy time before applying being 3-5 years.
- Income: Your annual income is another thing to consider before applying for the government scheme because certain lenders will only lend to people who earn enough annual income. Your application might be denied if you do not meet this criterion.
- Money spent on the property by the landlord: If your landlord has invested much in the property, your mortgage application could be in jeopardy. Lenders don’t typically offer discounts to properties where the landlord has invested more than the property’s value.
- Credit score: Your credit score is important when applying for an RTB mortgage. A bad credit score makes lenders think you will not pay the monthly interest and the other fees.
- Legal tenancy: You have to be a legal tenant if you want to apply for a Right-to-buy, meaning there has to be a legal contract between you and the landlord.
- Self-contained property: Your property has to be self-contained. That means that if you share the kitchen or bathroom with other people, the property won’t be deemed fit for the mortgage. You can, however, file a joint application if you share the tenancy with somebody.
Increase Your Chances by Getting a Mortgage Advisor Manchester
It is very important to work with a mortgage advisor Manchester when applying for an RTB government scheme. A mortgage advisor will guide you through the whole process, helping you get the best possible deal and doing most of the paperwork on your behalf. Without a mortgage advisor, you may find yourself confused during the process, which will only make it longer and decrease your chances of reaching the wanted result. For example, if the property seems overvalued or the interest rate is too high, your mortgage advisor will help you appeal to make things right.
Not only does a mortgage advisor help you with advice and paperwork, but they also have access to a wider set of deals than regular people. Mortgage advisors work closely with lenders, and their professional bond ensures they can provide you with the best deals. If you choose to apply on your own rather than use a mortgage advisor, you will certainly get a lesser discount and higher interest on the same deal. However, researching on your own also makes you susceptible to getting the wrong information which can lower your chances of success.
RTB Mortgage for a £100,000 Home
To get a better understanding of the discounts you can get, you’ll find an example of what a Right-To-Buy mortgage for a £100,000 home looks like below.
You get a 35% (£35,000) discount if you’ve been a tenant for 3-5 years. This discount increases by 1% each year after the five-year mark up until a 70% discount. For a £100,000 home, the graph would look like this:
- 3-5 years tenancy: £35,000
- Six years tenancy: £36,000
- Seven years tenancy: £37,000
- Eight years tenancy: £38,000
- Nine years tenancy: £39,000
- Ten years tenancy: £40,000
If you want to buy a flat, the applied discount will be even higher. You start with a 50% discount (£50,000) if living in a flat for 3-5 years, with additional years increasing the discount value by 2% up until a 70% discount. For a £100,000 flat, the discounts you will get are:
- 3-5 years tenancy: £50,000
- Six years tenancy: £52,000
- Seven years tenancy: £54,000
- Eight years tenancy: £56,000
- Nine years tenancy: £58,000
- Ten years tenancy: £60,000
The maximum discount you can get in the United Kingdom is generally £87,200 or £116,200 if you live in London. A mortgage advisor will help you look through your finances and decide if you will be able to secure the deal and if you will be able to handle the maintenance costs and the other fees and insurances that will come. If you’ve decided the RTB government scheme is the right one, you can find expert mortgage advisors online at Manchestermoneyman.com
A mortgage advisor Manchester will help you fill out the RTB1 application form and provide you with all the necessary information you need to know. A proper application will not raise any red flags for the lenders and will help you succeed even if you have bad credit or are self-employed. A mortgage advisor will also let you know the lenders with the lowest interest and will be aware of which lenders are most suited for your specific case. The whole Right-To-Buy process takes around 9 to 12 months to complete.