The Right to Buy scheme enables eligible council or housing association tenants to purchase their rented property at a discounted price. This government initiative has helped thousands of tenants become homeowners. If you qualify for the Right to Buy scheme, here’s a step-by-step guide to purchasing your home:
Step 1: Check Your Eligibility
Before starting the process, ensure you meet the eligibility criteria for the Right to Buy scheme. Typically, you must have been a council or housing association tenant for at least three years, with the property being your main residence. Other criteria may apply, so it’s essential to confirm your eligibility with your landlord or the local authority.
Step 2: Obtain a Valuation
Contact your landlord or the local authority to request a valuation of the property. They will assess the property’s current market value, which will determine the discount you are eligible for. The discount amount varies based on factors such as the length of your tenancy, the type of property, and the location.
Step 3: Receive an Offer
Once the property has been valued, your landlord will provide you with a formal offer letter. This letter will outline the property’s market value, the discount amount, and the final purchase price. You will have a specific time frame, typically eight weeks, to consider the offer.
Step 4: Seek Mortgage Advice
Consult with a mortgage advisor or lender to discuss your financial situation and explore mortgage options. They will help you understand how much you can borrow and what type of mortgage suits your needs.
Step 5: Receive an Offer and Mortgage Agreement in Principle
Once you have your mortgage advisor’s guidance, you can make an offer to your landlord based on the property’s valuation. If the offer is accepted, your mortgage advisor will provide you with an Agreement in Principle (AIP) from a lender. This document confirms the amount they are willing to lend you, subject to further checks and a full mortgage application.
Step 6: Instruct a Solicitor
Instruct a solicitor or conveyancer with experience in Right to Buy and mortgage transactions. They will handle the legal aspects of the purchase and liaise with the lender to ensure a smooth process.
Step 7: Complete the Mortgage Application
With your AIP in hand and solicitor instructed, complete the full mortgage application with your chosen lender. Be prepared to provide extensive financial documentation, including proof of income, bank statements, and details of your Right to Buy offer.
Step 8: Mortgage Valuation
The lender will conduct a mortgage valuation on the property to confirm its value and assess whether it meets their lending criteria. This valuation is different from the one performed by your landlord for Right to Buy purposes.
Step 9: Mortgage Offer
If the lender is satisfied with the valuation and your financial eligibility, they will issue a formal mortgage offer. Review the offer carefully, and once you are satisfied, sign and return it to the lender.
Step 10: Exchange Contracts
With the mortgage offer in hand, your solicitor will exchange contracts with your landlord or the local authority. This makes the purchase legally binding, and you will agree on a completion date.
Step 11: Completion
On the completion date, your solicitor will transfer the mortgage funds to your landlord or the local authority. The property ownership will transfer to you, and you officially become the homeowner.
Step 12: Repayment and Ongoing Mortgage Payments
From this point forward, you will be responsible for making regular mortgage repayments as per the terms of your mortgage agreement.
Conclusion
Purchasing your Right to Buy home involving a mortgage requires careful financial planning, professional advice, and coordination between different parties. By following this step-by-step guide and seeking the assistance of experienced professionals, you can navigate the process smoothly and successfully become a homeowner through the Right to Buy scheme.
Explore our Right to Buy Scheme page for further information.
Credit – Image by storyset on Freepik
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