The Key Worker Living guide to Homebuy. settle for more. Homebuy - the equity loan scheme for key workers

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1 The Key Worker Living guide to Homebuy settle for more Homebuy - the equity loan scheme for key workers

2 This is your guide to buying a property through the Key Worker Living Homebuy scheme. Homebuy is a scheme where you find a property on the open market. We will help you to buy your property by providing a loan of up to 50,000. If you qualify for Homebuy, simply complete the application form provided and return it to us. Your application will be assessed before you are given approval to find a property. We offer a quality service and are here to help you through the process of buying your home. We have funding for the Key Worker Living Homebuy scheme for key workers who work in the following areas: For further details call: or visit the Key Worker Living website and your question to us. London: www. keyworkerliving.co.uk South East: Low cost home ownership schemes are offered by non-profit making housing associations like Us, who with the help of government funds and private finance, provide opportunities to those who cannot afford to buy a home of their own on the open market.

3 What is Key Worker Living Homebuy? Key Worker Living Homebuy is a government led initiative to help key workers to buy a home, subject to eligibility, terms and conditions. It is supervised by the Housing Corporation, the government body that is responsible for housing associations in England, and the Office of the Deputy Prime Minister. How does Homebuy work? When you are given the go ahead to find a property you must act quickly as funds will be allocated on a first come first served basis. We will assess what you can afford against your current and future needs and will advise you of the amount of loan you will be eligible for. We will provide a loan up to 50,000 to help you buy your home (the amount of the loan will depend upon your housing need and affordability). This loan will be placed as a second charge on your property. You will need to fund the remainder of the purchase price of the property through a mortgage and/or personal savings. The loan will not involve you in making monthly repayments or monthly interest on the loan. Some Key Teachers in London boroughs are eligible for grants of up to 100,000 (the maximum value limit for a property is capped at 500,000). The size of the home that you can buy is based on the number of people that are going to live with you. Households of 1 or 2 people (including children) will be eligible for a 2 bedroom property. Households of three or more people (including children) will be eligible for a 3 bedroom property. You will be the freeholder of the property (unless you buy a leasehold flat). The loan must be paid back: (a) (b) (c) when you sell the property, or within two years of leaving your qualifying profession, or within two years of changing jobs to an area outside an approved zone - even if you remain in a qualifying profession. How do I qualify? You must be a public sector key worker in one of the following categories: Nurses and other clinical NHS staff, Teachers in schools and in further education and sixth form colleges. Police officers and some civilian staff in some police forces, Prison service and probation service staff, Social workers, educational psychologists, and occupational therapists employed by local authorities.

4 Detailed information on eligibility can be obtained from us. Eligibility is based upon employers priorities and criteria. You must be able to demonstrate that you are able to fund a conventional mortgage or have personal savings for the percentage of the market value of the purchase price of the home you want to buy. Your mortgageability will be based upon: - three and a half times single salary, or - three times joint salary. You must obtain a mortgage for the full amount based upon this calculation. Your savings, including any equity from the sale of a previous property if applicable, will also be taken into account. When we know what your contribution will be towards the property, we can advise you on the amount of loan which will be made to you, which will be based upon your current needs. Confirmation of your qualifying post and salary will be needed in order for us to approve you for the scheme. The following criteria must be met: You must be employed in a permanent post in the public sector. For a joint purchase, at least one applicant must be employed within the specified key worker group. You must be a British citizen or have a permanent right to reside in the UK. Your total household income must not exceed 60,000. family s needs or you are moving to an area where property prices are significantly higher, preventing you from buying a home suitable for your family s needs. Your home must be sold before, or at the same time as buying a home under the Key Worker Living Homebuy scheme. Assistance through the scheme can only be given to those who could not otherwise buy a suitable home within a reasonable travel to work area of their employment. The definition of travel to work area will depend upon the locality, the type of employment and the transport links. Applicants in rent arrears or who have been in arrears within the last year will not be eligible for the scheme. Applicants are required to certify that the information provided is complete and accurate and they will not purchase more than one property through schemes benefiting from public sector subsidy. They also need to confirm that the property is their own home. You must have sufficient savings to pay for your own legal fees and associated costs of home ownership. The mortgage must be from a qualifying lender such as a: - bank - building society - insurance company, or - Friendly Society. You must be unable to buy a property suitable for your needs without the help of Key Worker Living Homebuy. You must not currently own a property (this includes overseas) unless your current home is too small for your

5 What type of property can I buy? You may buy: on the open market (e.g. through an estate agent) a refurbished property a new home from part of a development. Your chosen home must be: a size suitable for your household need located in England for sale with vacant possession acceptable for mortgage purposes free from structural defects wholly for residential use (a flat over a shop is eligible provided it is self contained) have at least 80 years left on the lease if it is leasehold (usually flats). If you can afford to purchase a property in excess of 500,000 without assistance, you will not be offered an equity loan. We will take into consideration your mortgagability, savings and equity on your current property if applicable. Your survey You must have a survey report carried out if your chosen home is not brand new. The survey report must contain a Homebuyers report or equivalent. The home must be of satisfactory construction standards and in a reasonable state of repair. If your home is brand new from a developer, you will not need a homebuyers report, provided that NHBC insurance or an equivalent is provided. A home that is second hand, even if it is only a few months old must have the full Homebuyers report.

6 Are there any requirements after I have bought my property through the Key Worker Llving Homebuy scheme? Your responsibilities when you buy through this scheme include the following: The legal charge You will sign a legal charge that will record that you have bought your home with the help of Key Worker Living Homebuy. The legal charge sets out certain responsibilities you have. You must: keep your home in good condition, inform us and get our written permission for any improvements or alterations you make, not sublet your home to anyone else, keep your home insured, pay any service charges required of you. Repairs and maintenance You will be responsible for all the repairs and maintenance on your home, as any home owner is. If you own a flat you will be responsible for maintaining it inside. The freeholder will usually take care of external repairs and decoration to communal areas for which you will pay a service charge. If you own a maisonette, you usually will have an obligation to maintain the exterior with other occupiers and usually there is no service charge. Alterations and improvements You must notify us and obtain our approval for any alterations or improvements you intend on making to the property, for example, building an extension, altering the layout, etc. Any improvements you make to your home which potentially increase the value should be bought to our attention so that this can be considered when you sell your property. If you need to take out further loans for repair or improvement which have to be secured on the property, you will need to get our consent. You will not be permitted to obtain a further advance for debt consolidation. Insurance You will be required to confirm to us on the anniversary of the purchase of your property that you have renewed your buildings insurance. It is your obligation to ensure that the property is insured and to send us the confirmatory details.

7 What type of property can t I buy through the Key Worker Living Homebuy scheme? The following properties do not qualify: A property you are currently renting from a private landlord. Properties on sale at auction. A mobile home (including fixed homes covered by the Mobile Homes Act 1983), a caravan or houseboat. Properties offered to you at a discount under other publicly funded discount, incentive or assisted purchase schemes, except where subsidy is provided by a public sector employer in respect of its employees. A plot of land or home being built by the applicant as part of a self-build scheme. Properties occupied or part-occupied by sitting tenants. Commercial property. Homes owned or part-owned by the applicant or his/her spouse/partner, family member, business associate or someone joining the application. Properties in poor condition (homes will automatically be treated as in poor repair where the lender requires a mortgage retention of 3,500 or more). How much will it cost me? Before making a decision to proceed, it is important to consider the costs and responsibilities of buying your own property. You are advised to take your own independent advice before making any commitment. Applicants will be responsible for all the associated costs of home ownership. Purchase costs On-going costs We recommend that you will need savings of approximately 3,500 to meet the purchase cost which will include: A valuation and Homebuyers Report. Solicitor s fees, land registration fees, search fees and other disbursements. Stamp duty, which is a Government tax payable on all homes with a purchase price of 60,000 and above. Mortgage arrangement fees. Removal costs. Mortgage repayment. Council Tax. Utilities e.g. gas, electricity, water, phone bills. Building and contents insurance. Service charges and ground rent if applicable. Repairs, maintenance and the general cost of keeping your property in good order.

8 When do I have to repay the loan? Upon leaving your qualifying form of employment the loan will have to be repaid in full within two years. Exceptions to this rule include: Redundancy. Leaving with your employer s permission for health reasons validated by a health professional. Early retirement. Death in service. In such cases it would become a matter for probate and the paying back of the loan would be triggered by the sale of the property or transfer of ownership only. Selling the property or repaying the loan If you want to sell the property or wish to repay the loan you need to ask us for an independent valuation so that the value can be agreed and the loans paid in full. You will be responsible for paying for the valuation. We are required to provide this information by law. This loan must be secured by a mortgage over the home you buy. Your home is at risk if you do not keep up repayments on a mortgage or other loans secured on it. Under the terms of the loan there are no interest or other credit charges so the loan has no annual percentage rate (APR). But the amount you will have to repay when the loan comes to an end is linked to the value of your home at that time. You may have to repay less than you borrowed, but it is likely that you will have to repay more. If you have to repay more than you borrowed from Keystart Housing Association Ltd, the effect will be similar to a loan under which you pay credit charges at the rate by which your home has increased in value. For example, if your home increases in value by 4 percent a year, the sum you repay will be equivalent to borrowing under a loan with an APR of 4.0. Similarly, if your home increases in value by 8 percent a year, the sum you repay will be equivalent to borrowing under a loan with an APR of 8.0. Example Assume you buy a home for 100,000 and Keystart Housing Association Ltd provides you with 25,000 (a quarter of the purchase price). In seven years time you want to sell your home and house values have risen. Assume house prices have increased by about 6% a year, so that your home would be worth 150,363. In this example you would repay a quarter of the value when you sell the home, which is 37,591. As you are repaying more than you borrowed from Keystart Housing Association Ltd the amount you repay would be equivalent to borrowing the money at an APR of approximately 6%. Keystart Housing Association St James House, Broadway, London, W13 9BE. Tel: A charitable housing association The photographs in this brochure illustrate typical home interiors and do not depict a specific Keystart development KWL004-08