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Jackwolf

Mortgage help 425k council flat

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Just looking for some advice/feedback

I have the chance to buy my council flat, council have sent the offer of 425k, I live with my mum and she is the tenant, she is 68 and im 35, we get the full discount and I have a cash deposit of 115K , so I need a mortgage for 206k to complete the purchase. Ive only been in contact with 1 mortgage broker so far and am awaiting feedback but the guy i spoke to there didnt sound very confident mostly because of my mums age and the fact she would have to be on the mortgage ( does she? ) My salary is 35k and after the deposit ill still have about 25k in the bank.

im not quite sure what to do, because of brexit and house price uncertainty i feel like ill be buying at the top of the market ( location is E2 hackney ) problem is I dont want to wait another year saving more money only for the price to go up to 450k. The flat also needs about 15k worth of work before it is rentable, im a first time buyer but there is a spare bedroom in the flat that we could rent out.( after its been done up )

I dont even know if i could get a 206k mortgage in my current situation, or maybe I should challenge the offer and get the district yaluer to re-value it, as I said I wasnt here when the council valuer came around and so I wasnt able to point out all the negatives and stress the flat needs 15k worth of work ( need kitchen, bathroom, toilet, walls replastering and repainting, new carpets etc )

thanks all

 

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I doubt you'll get a mortgage based on the salary multiples never mind the really short term you'd need with most lenders restricting you to your Mums retirement age (I'm pretty sure she would have to be on the mortgage too, you can't use her discount and then your money/mortgage, it has to be joint)

And why are you talking about what it needs to have done to rent, where are you and your Mum going to live instead then?! Seems your intention could be more profit than protection of your Mum.

10 years time she may need a care home, then her equity is taken to pay for it and you're back to square one...

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My aunt was in her eighties when she exercised the right to buy, with her live in daughter. They got a sizable mortgage on the house using discount and the daughter salary. Lenders will lend on right to buy property, unless it is a tower block.

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Does your mum have any pension income - or just the state one which presumably after living expenses won't leave much?

Sadly otherwise you are looking at a six times salary mortgage - this is possible for high earners but not on your salary. You might get 4.5 times at a push with some lenders - which might get you close to £160k but not over £200k

I suggest you book an appointment with a mortgage broker locally - some will do fee free or give an hours free advice. Just to check out your options.

Bear in mind other costs though like service charges and future repairs to the block. As a leaseholder you would be liable for those - and they can be quite large on some blocks. But that depends on what sort of flat it is.

In the end your mum has stable secure council housing on a subsidised rent for life - you have to ask if this is worth the stress to you and her than staying as now. Might depend though as to whether you will be able to inherit the tenancy in future.

Edited by MARTINX9

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When I bought, the mortgage brokers told me I could get 4.5 times my salary (this was some months ago).

If that's a general rule, you may be unable to get a 206k mortgage on a 35k salary and you might need a "partner" in this. 

Other than that, while I'd normally say "go for it", 206k is a lot for someone on a 35k salary. If  they do lend you that much, you could be biting more than you can chew. Not trying to discourage you, but do you realise how much that is compared to your salary?

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On 4/29/2017 at 6:38 PM, Jackwolf said:

Just looking for some advice/feedback

I have the chance to buy my council flat, council have sent the offer of 425k, I live with my mum and she is the tenant, she is 68 and im 35, we get the full discount and I have a cash deposit of 115K , so I need a mortgage for 206k to complete the purchase. Ive only been in contact with 1 mortgage broker so far and am awaiting feedback but the guy i spoke to there didnt sound very confident mostly because of my mums age and the fact she would have to be on the mortgage ( does she? ) My salary is 35k and after the deposit ill still have about 25k in the bank.

im not quite sure what to do, because of brexit and house price uncertainty i feel like ill be buying at the top of the market ( location is E2 hackney ) problem is I dont want to wait another year saving more money only for the price to go up to 450k. The flat also needs about 15k worth of work before it is rentable, im a first time buyer but there is a spare bedroom in the flat that we could rent out.( after its been done up )

I dont even know if i could get a 206k mortgage in my current situation, or maybe I should challenge the offer and get the district yaluer to re-value it, as I said I wasnt here when the council valuer came around and so I wasnt able to point out all the negatives and stress the flat needs 15k worth of work ( need kitchen, bathroom, toilet, walls replastering and repainting, new carpets etc )

thanks all

 

If you can pay your rent then your priority is to look after your Mum if you have no other family to help. What happens to the flat if god forbid she passes? If the mortgage is the same as your rent, then buy but read and make your own choice. Most here think the market will crash.

Rentable? You live in social housing and have the opportunity to buy; to rent it you would have to have the terms of your owner-occupier mortgage changed.

 

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