The Right to Buy scheme was introduced by the UK government in the 1980s, giving eligible council and housing association tenants the opportunity to purchase their home at a discounted rate. While the scheme has undergone many changes since its inception, it remains a popular option for those looking to step onto the property ladder. In recent years, a Right to Buy mortgage agreement in principle has become an important first step in the home-buying process.
What is a Right to Buy mortgage agreement in principle?
An agreement in principle, or a mortgage decision in principle, is a pre-approval for a mortgage before the homebuyer has found a property. It is also known as a mortgage promise, mortgage in principle, or a mortgage pre-qualification. A Right to Buy mortgage agreement in principle is a pre-approval for a mortgage specifically for those looking to purchase their council or housing association home under the Right to Buy scheme.
Why is a mortgage agreement in principle important for Right to Buy?
A Right to Buy mortgage agreement in principle is important because it shows that the homebuyer has the financial means to purchase the property. It also gives the homebuyer an idea of how much they can afford to borrow, which can help them determine which properties are within their budget. Additionally, having a mortgage agreement in principle can make the homebuyer a more attractive candidate to sellers, as it shows that they are serious about their home search and have taken steps to secure financing.
How to get a Right to Buy mortgage agreement in principle?
To get a Right to Buy mortgage agreement in principle, the homebuyer must first find a lender who offers mortgages for Right to Buy properties. This can be a challenge, as not all lenders offer this type of mortgage. The homebuyer will need to provide the lender with information about their income, expenses, and credit history. Based on this information, the lender will determine how much they are willing to lend and what interest rate they will charge.
Conclusion
Getting a Right to Buy mortgage agreement in principle is an important first step in the home-buying process for those looking to purchase their council or housing association home. It shows that the homebuyer has the financial means to purchase the property and gives them an idea of how much they can afford to borrow. While it can be challenging to find a lender who offers mortgages for Right to Buy properties, it is worth the effort to secure financing for the home of your dreams.