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Council's
Right-to-Buy Mortgage – Helping Everyone
Have a Home
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by:
James Taylor
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“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.
About the Author
James Taylor works for the personal loan web site
http://www.chanceforloans.co.uk. To find a Personal loan and mortgage
that best suits your needs visit http://www.chanceforloans.co.uk.
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