Technically speaking, right to buy is not a separate mortgage category. Eligibility for a mortgage to fund a Right to Buy home purchase is established in the same way as a conventional mortgage; however, there is a separate mortgage category for bad-credit mortgage applicants, who would be unlikely to qualify with any mainstream lender. If you intend to purchase a property under the Right to Buy scheme and have issues with your credit history, it is essential to target specialist bad credit mortgage specialists with the help of an independent broker. You can even use our mortgage calculator in the UK to work out how much a mortgage would cost you.
Are bad-credit mortgages for the right to buy available?
The short answer is yes, although you are unlikely to find the support you need on the High Street. The specialist bad credit mortgage sector, aka subprime lending, is growing and diversifying and remains a facility most major banks and lenders are reluctant to offer or even fairly consider.
Subsequently, the key to finding and qualifying for a competitive bad credit mortgage lies in working with a specialist broker, who can compare the market on your behalf and find your perfect lender.
How can I tell if I have bad credit?
The three main credit reference agencies are Experian, Equifax, and Call Credit. Establishing if you have bad credit is therefore simply a case of checking your credit score with all or one of these three agencies.
If you have any questions, concerns, or doubts, they can be raised and discussed with your broker. If your credit score is low, specialist bad credit mortgages may be the only viable option. If your credit score is imperfect but far from catastrophic, you may be advised to work on improving it before applying for a mortgage.
Will I qualify for the right to buy a mortgage with bad credit?
The extent of the damage to your credit score will play a role in determining your eligibility or otherwise for a Right to Buy mortgage; however, specialist subprime lenders consider multiple additional factors alongside credit scores.
For example, your employment status, income level, current financial position and performance, assets, and other contributory factors will be considered. Ultimately, your lender simply needs to establish whether you are in a comfortable position to keep up with the repayments on your home loan.
How does bad credit affect the right to buy a mortgage?
Poor credit can affect a right-to-buy mortgage in the same way it affects any conventional mortgage. Interest rates and borrowing costs may be higher, and it may be more challenging to qualify in the first place; however, it is still perfectly possible to access an extremely competitive deal with expert broker support. Rather than approaching any lender directly with your application, you will find the process quicker, easier, and more cost-effective with a reputable broker in your corner.
For more information on any of the above or to discuss bad credit Right to Buy mortgage applications in more detail, contact a member of the team at UK Property Finance today.