Right to Acquire mortgages
What is a Right to Acquire Mortgage?
In 1996, the Government introduced the Right to Acquire scheme to help Housing Association tenants who meet the qualifying criteria to buy the homes they currently rent to live in. If they are eligible, they will be able to get a discount on the market value of the house when they come to purchase.
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Can I get a Right to Acquire scheme mortgage?
In recent times, many people have struggled to get their first foot on the property ladder. But, if you’re currently renting your home from a Housing Association then you may be able to take advantage of the scheme.
The scheme will give you the opportunity to purchase your home and invest in an asset for your future. Remember, if you qualify you will be able to purchase the home at a discounted price.
If you’re a Housing Association tenant and want to understand your eligibility, why not reach out? Our expert mortgage advisors can run through your circumstances and plans over a free no-obligation consultation.
Right to Acquire vs Right to Buy – what’s the difference?
The Right to Buy scheme was designed specifically for tenants of council properties, owned by local authorities.
The Right to Acquire scheme is intended purely for Housing Association tenants, where the properties are privately owned but managed by a trust who rent them out to people who need financial support.
One thing the schemes have in common is that they allow you to purchase your home at a discounted rate, under market value.
If you now live in a Housing Association property but were previously a council tenant in the same property before it passed to private ownership, then the Right to Buy scheme still applies to you.
How do I qualify for the Right to Acquire scheme?
To qualify for the Right to Acquire mortgage scheme, you must be an existing Housing Association tenant and have had a public sector landlord for at least three years. In addition to Housing Associations, landlords in the public sector can include councils, the armed services, NHS trusts and NHS foundation trusts.
Your property must be self-contained and your only or main place of residence. It must also have been built or bought by a Housing Association (and funded by a social housing grant from the local council or Housing Corporation) after 31st March 1997, or have been transferred from a council to a Housing Association since the same date.
Your landlord must also be registered with the Regulator of Social Housing. They keep a statutory register of social housing providers.
You’ll be ineligible if you’ve received a court order to leave your home, or if you’re in the process of bankruptcy.
If you, your property, and your landlord all satisfy the various necessary criteria, then you will be able to progress to the next stage.
The process of buying a housing association home?
Lenders eligibility for a Right to Acquire mortgage
There are now many Right to Acquire mortgage lenders on the market who are willing to offer these mortgages. That is, of course, if you meet both the requirements of the scheme and their eligibility criteria.
In some instances, you may not need to put down a deposit yourself. This will depend on the lender and their own individual policies. Typically, the size of the discount will influence your deposit requirements, but many are able to accept the discount on the house price under the scheme in place of a deposit.
Some other criteria elements a lender will assess during the application process include:
- Your affordability – a lender will look at your income and expenses to determine if you can afford to borrow.
- Credit score – like any application, a lender will assess your credit history. A bad credit score can make it difficult to obtain a deal, ending in your application being declined. It could even prompt a lender to offer you a less competitive deal.
Be aware that if you approach lenders directly, they’ll only be in a position to offer you products from their own portfolio. They will also only be able to make assessments on your financial position based on their own criteria.
Instead, talking your situation over with a specialist mortgage broker will give you a broad view of lender and product options.
Specialist Right to Acquire mortgage broker
Securing an affordable Right to Acquire mortgage will be key in the shift to owning your own home instead of renting. At The Mortgage Centres, we have an in-depth knowledge of the mortgage market. Not only this, but we also have great relationships with many lenders and access to deals that you won’t on the high street.
Our team of advisors include specialists in every type of mortgage. This includes Right to Acquire and Right to Buy. So no matter your mortgage query we will be able to place you with an expert in the field.
If you’re looking to obtain a Right to Acquire mortgage, get in touch today.
Phil Scott
Director
About the author
Phil has worked in the financial services industry since 1992, having started with a large insurance company. He went self employed in 1996 as an Independent Financial Adviser before setting up his first company, Needham Market Home Financial in 1999.
After four years, he decided to concentrate solely on mortgages and related insurances, and The Mortgage Centres was born. Since then, Phil has been influential in the opening of several new offices as the business continues to grow.
Qualifications
Financial Planning Certificate: 1,2 & 3
Year Attained: 1992
Certificate in Mortgage Advice and Practice (CEMAP)
Year Attained: 2001
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