Key Worker Mortgages

A Key Worker Mortgage is a homebuy program designed to make affordable an otherwise expensive housing cost to key workers with relatively low income levels.

The key worker scheme is government driven and is targeted at key public service workers in a number of vital sectors such as:

  • Education
  • Health Services
  • Emergency Services
  • Law Enforcement

Available Key Worker Mortgage Options

The main key worker mortgage options are:

  • Open market homebuy loans
  • New build homebuy loans or Shared ownership loans

Open Market HomeBuy Loan
The Open Market HomeBuy is a very popular program as it offers qualifying key workers, access to an Equity Loan to assist in the purchase of a property on the open market through an Estate Agent. Successful key workers usually have to fund 75% of the purchase themselves by raising a mortgage, in this case, the Key Worker Mortgage.

The 25% Equity Loan is repayable in the same percentage of the property’s value or eventual sale price.

New Build HomeBuy or Shared Ownership Loans
New Build HomeBuy was formerly the Shared Ownership Loan. Hence, the basic concept remains the same. In this program eligible applicants are offered the opportunity to “Part Buy Part Rent” a newly built property from a Housing Association.

What can be bought is initially between a 25% and a 75% share of the property, with a below market rent being paid to the Housing Association on their remaining share.

Key Worker Mortgage Concerns

  1. A down payment is required. If you do not have enough cash to pay the down payment, look for mortgage lenders who will let you borrow 100% of your share within market leading rates!

  2. Know you credit rating. If you have a poor credit rating, you need not worry. You can still locate a mortgage lender who understands a key workers individual circumstances and might allow you to borrow 100% of your share on exceptionally competitive terms.

    Please bear in mind that some key worker mortgage specific schemes may not accept applicants if they do have a poor credit rating. Furthermore, it is still the Housing Association that ultimately approves such applications.

  3. If Key Worker Mortgages up to 25% of a property’s purchase price is available in your desired area, check your ability to repay the loan as the amount available to be borrowed will largely depend on that. Your level of income and financial expenditures will influence how much the lender is prepared to loan to you.

When to Consider a Key Worker Mortgage

If you are eligible for a key worker mortgage, looking into and taking part in a Key Worker Mortgage scheme to finance a new house or flat might be just what you need to get started. You should be aware that if you change your employment situation you might cease to be considered as a Key Worker, in effect you will not qualify for a Key Worker Mortgage.

In certain cases of redundancy or loss of employment due to ill health, the loan need not be repaid until the property is sold. If you are stable in your job and eligible for a Key Worker Mortgage, buying a home partly funded by this method is likely to be beneficial, especially if property prices continue to be prohibitively expensive for low income employees.

Just remember that a Key Worker Mortgage can only be used when buying a main residence; it cannot be used for the purchase of a ‘buy to let’ property.

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