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A key worker is a professional employed in specific public sector jobs like health, education and emergency services. The government has initiated several mortgage schemes for the purpose of engaging and retaining key workers in areas where housing costs are high. These programmes make available homes to these essential professionals with low incomes.
Three kinds of Key Worker Mortgages are available, at present. These are the Homebuy Loan, offering up to 50,000 pounds, the Higher HomeBuy Loan offering up to 100,000 pounds and the Shared Ownership Loan, which is available for buying at least 25% in a new home. The second category is accessible to senior schoolteachers in London only.
Key workers must work in London, South East England or East Anglia to qualify for the scheme. Furthermore, the schemes are obtainable to workers at specific jobs. These include teachers, social workers, police staff, fire fighters, prison offices, NHS medical staff, educational psychologists and occupational therapists employed by the government.
If you are a key worker intending to buy a home, you must first arrange a conventional mortgage from a lender for 75% of the property worth. You may then apply for the HomeBuy scheme, which may cover the balance of the home cost. The lender will make available a sum, based on your income level and credit history.
If you want to avail of a shared ownership loan, you will need to buy a share of the property, ranging between 25% and 75% from a housing association. You will need to pay rent on the remaining share of the property to the association. The rent is as low as 3% of the value of the stake owned by the housing society. You will have to pay a service charge every month, as well.
A Key Worker Mortgage places some requirements on the homeowner. The property must be your primary residence. You must take responsibility for the maintenance of the property. Additionally, you must take out building insurance.
If you cease to meet the criteria for being a key worker after buying the property, you must give your housing association notice, within 7 days of changing your status. You will have to repay the loan. However, if you lose your job because of health issues, you may repay the loan after selling the home.