Company director mortgage / Buying council house help!!

[Tata123]

I work as a valuation surveyor and we handle right to buy applications on behalf of councils and housing associations, the discount is based purely on your number of years as a tenant and, assuming you’re not in London, capped at £84,200/70% of market value, whichever is the lower. You are eligible for 35% discount after 5 years of tenancy with a subsequent 1% (2% if a flat) discount every year after so to get full discount you need to have been there for 40 years. They can also use years in a different council house in the same council area and add them together. Generally the discount is used in lieu of a normal deposit if you’re buying on the open market.

Getting a mortgage can be a bit “easier” than credit cards etc as it’s a loan secured against the house value and they lender will just take the house and sell it if you don’t keep up with the repayments. I’d say speak to a mortgage broker for further advice but a lot hangs on having a surveyor do the valuation.

someone said above about discount being partly based on work you’ve had done etc, this isn’t exactly true but along the right lines, the legislation around RTB says that any works/improvements the tenant has carried out will be disregarded and a basic standard is assumed, so for example if you were given a 2 bed house and have converted it into a 3 bed, it will be valued as a 2 bed for the purpose of a right to buy application.

the RTB scheme generally is controversial as it is removing council housing from the total housing stock and new council housing isn’t being built, the money from the sale doesn’t even all go back to your local council, it goes to central government and then a small amount is given back to whichever council sells it. The scheme has been stopped in Scotland and wales for this reason so if you can do it then do it now but on the other hand if you don’t absolutely have to use right to buy and can afford to buy privately then perhaps consider that option and let a family who need a home have your council house, in reality I can’t imagine anyone will turn down a big state funded discount though!

hope this helped

 

[Fizzwhizz2020]

I did and they can’t I have to make the full application
Which is so long winded. There is even an appointment with the councils fraud officer to ensure the application is genuine and not a fraudulent application (due to the high level of discount!) !


and houses prices along my row vary greatly!!!

Maybe speak to a broker and see if you can get a mortgage in principle then you know what you’d be able to afford. Then at least you have an idea based on salary and deposit. In e meantime you could make an application to the council to see what the value is. There’s no point going through the whole mortgage process with all the checks etc, which will further lower your credit score (MIP) is a soft search so has no effect on score. Then at least you know if you can afford it

 

[BettyCrocker]

Hi All,

so me and hubby are finally after many many years in a financial position to buy our house. However we have some obstacles to overcome


4) how do I know how much the council will sell my house too me for? I don’t even know how much I will need to borrow

Surely you need to find out the cost of buying the house before you can think about anything else?!!!! Just phone the council and ask!!!!

 

[Giggling Squid]

Your best bet would maybe be to speak to a financial advisor who will have a much better idea of what you’re able to afford, mortgage options, how your current salary and finances would be taken into account and be able to offer advice as to how to improve your financial status if it’s not currently idea for a mortgage. There must be some that specialist in right to buy who would know

 

[Thetruth123]

Hi All,

so me and hubby are finally after many many years in a financial position to buy our house. However we have some obstacles to overcome

1) he is a company director and he takes a dividend and pays him and me paye under the tax threshold so on paper our income between us around £47,000 a year

2) we both have bad credit everything has been paid off so we do not owe anything!!!! But we can not even get a credit card! So unsure how we can even build it back up

3) can we use the £83,000 discount as the deposit for our mortgage?


4) how do I know how much the council will sell my house too me for? I don’t even know how much I will need to borrow I have an idea but I want to know if it’s even pheasable to do....in theory it is but I know how strict lenders are

it really pisses me off how hard all this feels as all these Fucking love island / reality tv stars seem To be buying up all kinds of big fuck off houses all from selling crap to gullible idiots!
Thanks for any help guys

 

[Lulu Goss]

Yeah so purchase our council home using the right to buy scheme xx

Ahh ok. That’s weird that they won’t give you the price upfront, like you said how are you supposed to know if you can do it if they don’t?

I agree with Pinkblush though, you could look at similar properties on your street to get an idea

 

[Caffeine Fiend]

Go to a broker. I have known council tenants being able to use the discount as a deposit but most high street banks wont allow that and its generally specialist providers who allow it.

First step, contact a whole of market broker, they will do a full statement of outgoings and incomings with you and give you an idea of what you could borrow. They will also be able to give you advice on what providers may allow the discount to be used as deposit.

 

[Fizzwhizz2020]

Hi. I wouldn’t think that you’d be able to use the discount towards a deposit, it would just be 10% min of what the value of the house is, so you will need savings for that as well as stamp duty and solicitors fees, survey fees etc. I think the best thing you can do is build you credit back up as mortgage lenders are pretty tough at the moment so they need to see good credit. It can take months of things being paid up for your score to go back up. I’d get that in Oder before you apply for a mortgage. Definitely don’t apply for credit cards etc as that all shows on your credit score when they do a search. Independent Mortgage brokers can usually find the best deals so you could always speak to one as you don’t pay anything. Good luck

 

[Lsj18289]

Hi. I work as a mortgage underwriter for a large bank. You can use the RTB discount as your deposit, just make sure all your paperwork is signed by both parties and present it to your lender along with income evidence and bank statements. You may be required to provide a 12 month business bank accounts due to covid to ensure income hasnt been negatively impacted. As for the debt, if you have a reasonable explanation, evidence of all debts cleared and a track record of min 12 month of steady income/outgoings and evidence you can manage your money suitably then an underwriter will take everything into consideration. Normally loan and credit card applications are processed through an automated system that look purely at credit score and do not have the scope for manual decisions. Even if your mortgage application initially declines, there is an appeals process that can be followed. Wish you all the best.

 

[Thetruth123]

Thank you I dId work in the housing department at my local council not the RTB department but I did ask and they said I am definitely entitled to the discount so that’s not an issue, my house has no major renovations just decorating works.
I totally get the point about RTB being a double edge sword though..... but without my discount we wouldn’t be able to afford to buy (I’m hoping as per original post)
It my way into the property ladder it’s just sad the government don’t seem fit to have the money back to councils to re build..... as sad as it is and harsh as this may sound I’m looking out for my family’s financial best interests

my house is period property built in 1888 on a main road with only 8 properties on the row. All private except mine .....prices range from £300,000 to £500,000, they all have lost convertions and extensions so comparing mine is hard. It’s not a standard council house.

I think I’m going to make the application and at least I will have a price to go on firstly

I work as a valuation surveyor and we handle right to buy applications on behalf of councils and housing associations, the discount is based purely on your number of years as a tenant and, assuming you’re not in London, capped at £84,200/70% of market value, whichever is the lower. You are eligible for 35% discount after 5 years of tenancy with a subsequent 1% (2% if a flat) discount every year after so to get full discount you need to have been there for 40 years. They can also use years in a different council house in the same council area and add them together. Generally the discount is used in lieu of a normal deposit if you’re buying on the open market.

Getting a mortgage can be a bit “easier” than credit cards etc as it’s a loan secured against the house value and they lender will just take the house and sell it if you don’t keep up with the repayments. I’d say speak to a mortgage broker for further advice but a lot hangs on having a surveyor do the valuation.

someone said above about discount being partly based on work you’ve had done etc, this isn’t exactly true but along the right lines, the legislation around RTB says that any works/improvements the tenant has carried out will be disregarded and a basic standard is assumed, so for example if you were given a 2 bed house and have converted it into a 3 bed, it will be valued as a 2 bed for the purpose of a right to buy application.

the RTB scheme generally is controversial as it is removing council housing from the total housing stock and new council housing isn’t being built, the money from the sale doesn’t even all go back to your local council, it goes to central government and then a small amount is given back to whichever council sells it. The scheme has been stopped in Scotland and wales for this reason so if you can do it then do it now but on the other hand if you don’t absolutely have to use right to buy and can afford to buy privately then perhaps consider that option and let a family who need a home have your council house, in reality I can’t imagine anyone will turn down a big state funded discount though!

hope this helped
[

 

[Thetruth123]

Thank you , you have made me feel a lot less stressed!!

Hi. I work as a mortgage underwriter for a large bank. You can use the RTB discount as your deposit, just make sure all your paperwork is signed by both parties and present it to your lender along with income evidence and bank statements. You may be required to provide a 12 month business bank accounts due to covid to ensure income hasnt been negatively impacted. As for the debt, if you have a reasonable explanation, evidence of all debts cleared and a track record of min 12 month of steady income/outgoings and evidence you can manage your money suitably then an underwriter will take everything into consideration. Normally loan and credit card applications are processed through an automated system that look purely at credit score and do not have the scope for manual decisions. Even if your mortgage application initially declines, there is an appeals process that can be followed. Wish you all the best.

 

[Curtains]

I bought a council house through RTB a few years ago. You do need to go through the process in order to get a valuation as, the council will send their own surveyor/valuations person out.
I didn’t have a deposit and managed to use the discount as deposit (I had maximum discount). It was win win for the mortgage company really as, if I’d have defaulted on any payments and they had to take the property to auction, they would have got more than their money back!
I used a mortgage broker as a lot of the high street banks I had appointments with were not all that interested. It was well worth his fee and, I even got extra on the mortgage to use for home improvements.
You can go through the process with your council and then decide not to buy but repeat the process further down the line, it won’t affect your RTB

 

[hiya_hun]

How long have u been in the house?

 

[Lulu Goss]

Do you mean that the council are going to give you money to give up your council property? Or that you’re buying the property you live in now from the council?

 

[Thetruth123]

Thank you for help and advice

 

[JoeBloggs]

I would speak to a broker first, this will give you and idea of how much you can borrow and therefore what you can afford.

You won’t be able to use the discount and will need a 10-20% deposit.

As you know the discount amount, surely this gives you an idea of the house value? You could ask an estate agent to value it and then take the discount off. It’s would be a rough idea of the value then.

 

[Thetruth123]

I did and they can’t I have to make the full application
Which is so long winded. There is even an appointment with the councils fraud officer to ensure the application is genuine and not a fraudulent application (due to the high level of discount!) !


and houses prices along my row vary greatly!!!

Surely you need to find out the cost of buying the house before you can think about anything else?!!!! Just phone the council and ask!!!!

 

[Pinkblush]

You should google similar houses in your street via zoopla/rightmove which will at least give you a rough idea of property value.

 

[Thetruth123]

Thanks ladies xx

 

[Thetruth123]

Yeah so purchase our council home using the right to buy scheme xx

Do you mean that the council are going to give you money to give up your council property? Or that you’re buying the property you live in now from the council?