RIGHT TO BUY MORTGAGE WITH BANKRUPTCIES
Right to buy mortgages work the same way as typical residential mortgages. Right to buy mortgages offer to people same properties people who purchase through the typical residential mortgages get. The amount you are allowed to borrow depends on the value of the property you want to purchase in the market, your deposit, your credit rating and your income.
The right to buy scheme allows existing tenants of homes that belong to the public sector in England to purchase they house they currently rent at a price lower than the market value. Although there are schemes which are similar to this in Wales and Northern Ireland, they differ slightly. This scheme has been existing for years and I’ve a million council houses have been sold to tenants. There has been some changes in the eligibility and the discount rate over the years. The qualifying tenancy period is currently three years and the maximum discount rate has been increased to £82,800.
The discount you will get on a right to buy property depends on the type of property and how long you gave been a tenant in the public sector. For houses, tenants become eligible for discount high as 35% after three years tenancy and the discount rate increases by 1% for each additional year the individual spends in the public sector. For flats, Tenants become eligible for discounts as high as 50% after three years of being tenants and the discount rate increases by 2% for each additional year they spend as public sector tenants.
If you have a bad credit rating, you can still acquire a right to buy mortgage. Bad credit rating associated with bankruptcies will leave you ineligible to apply for right to buy mortgages but they can still be resolved with time. It is important that you speak to a mortgage broker or specialist so they can help you figure out the lender’s that can consider you fir a right to buy mortgage with bankruptcies. They can also help you get the beat deals in the market as they already know the mortgage brokers who offer that.
Most of the right to buy mortgage lenders who who right to buy properties can lend up to 100% of the RTP price , and they often use the open market valuation while calculating your loan to value and some will lend you more than the price of the right to buy. While searching for right to buy property, there are a number of things that need to checked out such as the percentage of the property value which you need to borrow from the lender, if you prefer fixed or discounted rate deal etc
For people with bankruptcies, the discharge date is very important in determining whether their application will be accepted or not. . Most lenders will decline your offer if you’ve ever had any bankruptcy, while some will accept your application only if your bankruptcy has been discharged after six years, or over three years. Only a few of them will consider if you have been discharged over a 12 months.Depending on the credit issues you have, you might not need to use any of your cash as deposit as you will get equity against the open market value from the discount you are going to receive as a part of the right to buy scheme. However, if you want to add a part of your cash to the discount you are going to receive as a part of the right to buy scheme, it will go a long way in lowering the amount you need to borrow and will also lower the interest rate you will be offered.
After your bankruptcy has been discharged, there are other factors that lender’s look at while considering your application and these include the following
The type of property you want to purchase: If the property you plan to buy has any elements of non-standard construction such as concrete panels, high rise flats and timber frames, you will require a specialist lender to help you get the best rate.
Your age: If you have retired before looking for a right to buy mortgage, you will have limited options of lenses to choose from as most of the lender’s do not want to lend to people who are above 75 years , some can stretch to 8 5 years while some do not have age limits, they just need to be convinced that you will pay.