Key Worker Mortgages
The Government sponsored Starter Home Initiative is a Key Worker Scheme designed to allow those in the certain sectors to buy a property close to where they work. You should check with your local authorities for any regional inclusions and latest deals.
- NHS staff including nurses and midwives
- Emplyees in further education and schools
- Probation and prison service staff
- Police officers
- Social workers
- Full time junior fire officers
Some of this criteria will vary across Regions depending on local retention and recruitment policies. You will need to contact the zone agent in the area that you work in. The agent will deal with applications and assess each individuals eligibility for the scheme.
Lenders require the applicants to provide a 5% deposit from their own resources in addition to the government incentive. Each scheme will be considered on its merits.
If there is more than one buyer, the application and legal charge documents are to be completed and signed in joint names. The effect of this is to ensure that all of the property owners are legally bound by the terms of the legal charge jointly and severally.
The legal charge document incorporates various conditions to be complied with by the homebuyer. These include (but are not limited to):-
- The upkeep of the property,
- Taking out adequate buildings insurance with notification of the Housing Association's interest on the policy as the lender,
- Giving the Housing Association notice, usually within 7 days, of your ceasing to qualify as a Key Worker,
- The property must be your only or main residence.
The Equity Loan will become repayable when the property is sold or let to another person, or if you cease to be a Key Worker.
If there is to be any future disposal of the property the amount repayable on this is calculated as a percentage of the value of the property at the time of sale and not of purchase, this takes into account any increase in value of the property over time.
The percentage applicable is the percentage of the purchase price represented by the Equity Loan. This means that if you purchase a property for £100,000 and obtain loan of £25,000, the percentage applicable will be 25%. If you decide to sell and your home is valued at £150,000, the amount repayable will be £37,500 being 25% of £150,000.
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