The right to buy mortgage is a scheme offered by the government to individuals who wish to finally have their own home. After being a tenant for years, you might start thinking about having a more stable future. Having a place to call your own is a great first step.
When this scheme was established, the main goal was to provide an opportunity for tenants to buy a property they were already residing in. It also provided middle class workers a chance to move up the social ladder and have a more secure future.
There have been changes over the years and some of these changes were favourable. If you are interested in giving it a shot, here are some of the most common questions asked and the answers to these questions.
Is a deposit necessary?
When getting a mortgage, you will be asked to pay a deposit. This is a standard practice to ensure that you really are taking this scheme seriously. However, this scheme is unique in the sense that the discount offered to you can actually be used as the deposit. You need not come up with a deposit right away just to buy the property. Be sure to check with your lender though as some of them won’t accept the discount as a deposit.
Can the property be sold?
There are certain rules when it comes to selling the property. If you decide to sell the property within the first year, you would be required to pay the full amount of the discount granted by the government. For the next 2 to 5 years, a certain percentage of the discount would be repaid. It is best to wait for 5 years to sell the property. Better yet, keep it. The goal of the scheme is for you to have a property under your name. Selling it just does not make sense.
Do you need an adviser?
Definitely! There are right to buy mortgage advisers who are willing to help you out. They will guide you through the entire process. They will help in checking the eligibility of the applicant. They will also try to answer any questions as much as possible since they are very experienced in the field. They have also worked with other people in the past who have applied for this scheme. Their independent financial advice will most likely help in making the process easier for you. The RTB1 form is the first step in the process and with an adviser by your side, filling it out will be a walk in the park.
Not everyone is granted this opportunity. If you happen to be eligible, you should make the most out of the scheme.
AS A MORTGAGE IS SECURED AGAINST YOUR HOME OR PROPERTY, IT COULD BE REPOSSESSED IF YOU DO NOT KEEP UP THE MORTGAGE REPAYMENTS.