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Council Right to Buy Mortgage - Helping Everyone Have a Home
of
"We will help every Council Tenant to become Home Owners" With
these historic words Margaret Thatcher initiated an equally
historic concept of council right to buy scheme. However, the
groundwork for this scheme had been laid much before in the 70s
under the reigns of the labour government.
The council right to buy scheme, without being embroiled in
any controversy regarding who set off the council right to buy
scheme, was indeed momentous. It led many people, who would never
have thought (capable would be a more appropriate word to
describe their situation) to have their own homes.
So what is council right to buy scheme? Council right to buy
scheme is a scheme under which the council tenants are eligible
to buy the house in which they have been living.
Therefore, what is that which distinguishes the council right
to buy scheme from the other schemes? It is different because the
customer would have to pay much lesser than what he would have
paid had he bought the house in the open market. This is because
the customer is entitled to a discount for the number of years
that he was staying in the house as a tenant.
The rate of discount varies with the type of residence and the
location of the residence. A person residing in a house will be
eligible for a discount of up to 30% with a further discount of
1% for every year lived as a tenant of the house. In cases of
flats or maisonettes the rate of discount ranges from 44% to 70%,
but not exceeding £38,000. The maximum rate of discount is
admissible only in a few localities like the posh London and the
Southeast areas of England.
To avail the scheme one must be a council tenant. A council
tenant is a secured tenant who has been living since 5 years or
more (the limit has been changed from 2 years with effect from
18th January 2005) in any of the following:
? District council
? London borough council
? Non-charitable housing association or other registered
social landlord
? Housing action trust.
? County council or another similar body
Numerous lenders who have sensed the importance of the scheme
offer mortgages especially designed to facilitate such purchases.
These mortgages are called council right to buy mortgage. A
council right to buy mortgage offers to pay the price of the
house. This will be an added attraction to the tenants to go for
the scheme. The council tenants can pay off to the council from
whom the house has been purchased, and then pay to the mortgage
provider in easy and affordable installments. In fact, the
monthly installment, which the tenant will have to pay, is lesser
than the rent he had been paying. Moreover, while the rent is a
sunk cost, the monthly installments facilitate you to have your
own home.
Getting a council right to buy mortgage is not that easy. One
must start the search process right from the day when they get
the offer. The approval process normally takes around 3 months.
To start the search late would mean getting the mortgage late.
This could mean losing on the offer for council right to buy. The
council tenant must also undertake a full structural survey of
the property.
The customer must be fully aware of the various formalities
that need to be met in case of a council right to buy mortgage.
The net can provide enough information about the mortgages.
Independent financial advisors can provide useful advice about
the various intricacies of the mortgage. A solicitor appointed by
the council tenant will act on his behalf in all legal
formalities. The solicitor will help in the documentation part of
the council right to buy which includes forms like RTB1, RTB2,
Section 125 notice, etc.
Next, one has to sort out one mortgage provider from the
numerous contenders. This is the most basic step and astuteness
in this step will decide how the mortgage fares in the long run.
The initial screening can be done through the net. The mortgage
providers have compiled the information about their operations
and the products that they offer on their websites. Careful study
of the information will help give a manageable list of 10-20
mortgage lenders. These mortgage lenders can be requested for
their no obligation mortgage quotes. Few more mortgage providers
are ousted in this stage. The customer then personally meets the
remaining mortgage providers. This is the final stage of the
selection process.
The last step will be to decide the amount of mortgage to be
taken. This will be derived after valuation of the house by the
council or housing association and deducting the discounts from
the price.
Treading in a step by step manner will be time consuming but
will ensure that one does not has to repent later. You would
surely cherish the output, which this effort leads to. The output
will be your home-your own home, a perfect allurement, for which
you will be ready to take any efforts.
James Taylor works for the personal loan web site http://www.chanceforloans.co.uk.To
find a Personal Loans, secured
Loans,unsecured loans and mortgage that best suits your needs
visit http://www.chanceforloans.co.uk.
 MORE RESOURCES updated Thu. February / 09 / 2012
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