People may look to borrow extra money on their mortgage for a multitude of different reasons. From consolidating debt through to investing in home improvements, additional borrowing on a mortgage is an attractive proposition for homeowners or would-be homeowners.
For almost forty years, the right-to-buy scheme has allowed council home tenants to take out mortgages in order to purchase their homes at a substantial discount. As a result, right-to-buy mortgages continue to be a popular way for people to achieve their first step on the property ladder.
Those eligible for a right-to-buy mortgage have to meet certain criteria, including being a resident for at least three years. Consequently, when the time comes to take out a right-to-buy mortgage, many people are thinking about making home improvements to the property, for example, an extension, a new kitchen or a new bathroom.
For those interested in right-to-buy mortgages, there is the opportunity to borrow more than the right-to-buy discounted price.
However, there are a number of factors to take into consideration – unfortunately, it’s not quite as simple as asking the lender to give you a bit more money!
In fact, there are a limited number of reasons that lenders would allow extra borrowing on a right-to-buy mortgage.
Are there lenders who will allow me to borrow more on my right-to-buy mortgage?
There are a small number of lenders who are able to offer you additional money on a right-to-buy mortgage, so you need to know where to search. This is where a specialist mortgage broker can help you.
You need to bear in mind that additional borrowing or funds are often only allowed for home improvements.
Do I need to get any other permissions in order to borrow extra money for my right-to-buy mortgage?
Yes, it is not just the lender you need to speak to if you’re looking to borrow additional funds with a right-to-buy mortgage. You will also have to seek permission from your local authority who will have to approve additional borrowing over and above the discounted purchase price.
What if I have a poor credit rating or a history of bad credit?
As with any mortgage application, credit history will play a role in an individual’s eligibility for mortgage deals.
Bad Credit Right to buy mortgages are still available to those with poor credit, bad debts or CCJs, however, it is worth noting that the range of mortgage deals available will be limited and these mortgages are provided by specialist mortgage lenders.
What is open to you will be based on a range of factors including your credit score, how much time has passed since something impacted negatively on your credit file, and also how much debt you need to pay back.
It’s a good idea to ensure you have your financial affairs in order before applying for any mortgage, including right-to-buy mortgages.
Plus, in instances of bad credit, we would always recommend seeking the expert advice of a specialist mortgage broker.