Right to Buy Mortgage Lenders Criteria
The scheme carries eligibility criteria around the applicant and the property in question:
- The applicant must not have any debt problems or be being legally pursued for debt repayments
- The applicant must not have any outstanding possession orders in place
- The property must be the applicant's main residence or their only home
- The property must not be specialist housing designed for elderly or disabled tenants
- The property cannot be on a demolition schedule
How Does Right to Buy Mortgage Affordability Work?
Being able to demonstrate affordability and the ability to keep up with your mortgage repayments is essential before considering any mortgage application.
Every lender will carry out affordability assessments before they can make any mortgage offer.
Depending on your home and other circumstances, discounts and subsidies will be available, so it is essential to understand what you can afford and how much your repayments are likely to be.
You can access mortgage calculators to estimate the required repayments or give the team at Revolution Finance Brokers a call, and we will be happy to walk through the process with you.
Usually, your monthly outgoings will remain consistent with your existing rent.
However, there are other costs to consider, including property insurance, arrangement fees and survey fees.
Ensuring you know about all the cost implications is essential before taking out a Right to Buy mortgage.
Applying for the Best Right to Buy Mortgages
Once you have considered the eligibility criteria and are confident that you can afford to keep up with repayments, the first step in securing a Right to Buy mortgage is completing the RTB1 form, the Right to Buy scheme application form.
You can complete this form online or obtain a paper copy from your landlord or housing association.
You can apply as an individual if you are the only tenant or can make a joint application including up to three family members, provided you have lived together at the property address for at least 12 months.
The application process usually takes between 4-8 weeks, and if your application is rejected, the landlord will advise you why. If your application is approved, you will receive a mortgage offer.
Receiving an Offer From Right to Buy Mortgage Lenders
Once a Right to Buy application is approved, the landlord will issue an offer notice called an S125.
This form usually takes around eight weeks to be issued for a freehold property or about 12 weeks for a leasehold property.
Your S125 will explain how much the property has been valued and what subsidy you will receive against this valuation.
Any structural issues identified during the valuation process will also be explained, along with any applicable terms.
How Can I Use a Right to Buy Mortgage Calculator to Estimate My Discount?
The discount you get depends on the type of property in question and how long you have been a tenant.
- For houses, the introductory discount currently stands at 35% for tenants who have been in residence for up to 5 years.
- This discount is extended by 1% for every additional year you have been a tenant, to a maximum of 70% or £82,800.
- This cap is extended to £110,500 in London.
- For flats, the introductory discount currently stands at 50% for tenants who have been in residence for up to 5 years.
- This discount is extended by 2% for every additional year you have been a tenant, to a maximum of 70% or £82,800.
- This cap is also extended to £110,500 in London.
