Right to acquire mortgage
Getting a right to acquire mortgage
The right to acquire scheme scheme is a government scheme introduced in 1996 where housing association tenants can buy their housing association homes at a discount. To get a right to acquire home you will need a right to acquire mortgage.
A right to acquire mortgage does not differ substantially from a typical mortgage but the mortgage broker handling your right to acquire mortgage may need to have some knowledge of how the right to acquire scheme works so they could advise you on the right kind of credit available to you.
Before you can get a right to acquire mortgage you will need to ensure you are eligible for the right to acquire scheme.
What discount is available with the right to acquire scheme?
You will be eligible for a discount of between £9000 to £16000 and this is based on location.
The discounts available with the right to acquire schemes can go a long way to helping more housing association tenants be eligible for the right to acquire mortgage and encourage them to buy their housing association homes.
Your landlord will let you know how much discount is available to you.
If you have used the right to acquire scheme before then there might be a deduction on the amount of discount available to you.
Are you eligible for the right to acquire scheme?
Before seeking a right to acquire mortgage you must ensure you are eligible for the right to acquire scheme.
To be eligible for the right to acquire scheme you will need:
- To have a had a public sector landlord for a minimum for 3 years and be currently renting from a public sector landlord. Public sector landlords could be councils, the armed services, NHS trusts, and NHS foundation trusts.
- The property must have been built or bought by the housing association after 31st March 1997 and funded through a social housing grant funded by a housing corporation or council.
- The property must have been transferred from a local council to a housing association after 31st March 1997
- Your Landlord must be registered with the homes and communities agency
- Your home must also be a self-contained property and your only home
- You will be able to make the application with someone who shares your tenancy and up to 3 family members who have lived with you for the past 3 months
- You won’t be eligible if a court order has been made against you to leave your property
- You won’t be eligible if you have been made bankrupt or have been ordered to leave your home by a court.
- You won’t be eligible if you are a council tenant
- You won’t be eligible if you have preserved right to buy
Getting the right to acquire scheme
If you are eligible for the right to acquire scheme you can then proceed to make an application.
To apply for the right to acquire scheme you will need to contact your housing association landlord who will then provide you with a right to acquire application form. Once you have filled the right to acquire application form you should promptly return it. Once you have returned the right to acquire application form your housing association landlord will have 4 weeks to get back to you or 8 weeks if they have been your landlord for less than 36 months.
If your housing association landlord agrees to sell the property to you they must send you an offer within 8 weeks or 12 weeks if the property is a leasehold property.
Your Right to Acquire offer
The offer provided by your housing association landlord should explain how they came to a conclusion on the value of the home, any issues the property has and how much of the right to acquire discount you are eligible for.
The right to acquire offer may also include information on any other costs you may owe the housing association landlord such as ground rent and other leasehold costs.
Once your housing association landlord has informed you of the offer you will usually have 3 months to get back to them and inform them if you will be accepting or declining their offer.
If you are unhappy with the valuation the housing association has placed on the property and want to dispute it you can instruct an independent district valuation to be carried out after which you will have 3 months to inform the housing association landlord of your decision.
Your housing association landlord will usually send you two reminders to respond to their offer. These are labelled as RTA4 and RTA5 reminders. If you do not respond to your housing association landlord within 3 months then your application may be discarded.
Getting a right to acquire mortgage
As mentioned prior, getting a right to acquire mortgage will mostly depend on your eligibility for the right to acquire scheme.
A mortgage broker with experience of right to acquire mortgages may be best suited to help you.
There are now a few mortgage lenders who offer the right to acquire mortgage and you may need to put down a mortgage deposit in some cases and in others, you may not need to.
Whether you will need to put down a mortgage deposit with your right to acquire mortgage will depend heavily on the amount of discount you get and the right to acquire mortgage lender.
Some right to acquire mortgage lenders will accept the discount as a form of mortgage deposit.
When looking to get a right to acquire mortgage you should avoid going directly to the mortgage lender as this may not always be the best mortgage option for you. Mortgage lenders have access to only their own products whilst [mortgage brokers](https://huutimoney.com/Mortgage-Broker) may be able to advise on all products on the market.
Can you get a right to acquire mortgage with bad credit?
Getting a right to acquire mortgage with bad credit may be possible but this will depend heavily on your individual circumstances. You should speak with a bad credit mortgage broker to fully analyse and understand your circumstances. Bad credit mortgage brokers will usually have niche knowledge of the bad credit mortgage market and may be able to provide you with a list of suitable mortgage lenders who may be willing to lend to you.
Bad credit may include:
- A CCJ
- An IVA
- A debt management plan
- A default
- A bankruptcy
- A home reposession
Do you need a mortgage for right to acquire?
Yes, you will need a mortgage for the gith to acquire scheme except you have the cash to purchase the home outright.
What is the difference between right to buy and right to acquire?
The main and obvious difference between the right to buy and right to acquire scheme is who they are aimed at.The right to buy scheme is aimed at council tenants and you must be a council tenant to be eligible for the right to buy scheme. The right to acquire scheme, on the other hand, is aimed at housing association tenants and you must be a housing association tenant to be eligible for the right to acquire scheme.
If you were a council tenant at the time the property you were renting changed ownership over to the housing association, then it is the Right to Buy scheme that applies to you.
What does the right to acquire mean?
Right to acquire simply means the right to acquire your home which you currently rent as a housing association tenant.
If you began your tenancy after the 18th January 2005 you need to have lived in the property for over five years to be eligible for thr right to acquire scheme. However, if you began your tenancy before this date then you need to have resided in the property for at least two years. In addition, the property should have either been bought or acquired by the housing association after the 1st April 1997.
Selling your Right to Acquire home?
If you wish to sell your home within 10 years you must first offer it to your landlord. Your landlord will agree on a price with you. If you disagree on the price you can request an independent valuation at no cost to you.
If you sell your home within 5 years you will have to pay some or all of the discount. You will pay back the discount amount you get in relation to your property sale price.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.