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NHS Mortgages – Your Guide to what you need to know
Who is eligible for an NHS Mortgage?
To be clear, there is no such thing as an NHS mortgage, there are lenders out there who will offer discounts to NHS employees but there is no specific NHS mortgage out there. In order to be eligible for any NHS discounts or lower deposits you will need to be employed by the NHS or an NHS Trust organisation to take out this type of mortgage. This includes:
- NHS GP Surgeries
- NHS Direct
- Ambulance Trust
- National Blood Transfusion Service
You will need to be deemed medical staff in order to access the schemes available to NHS workers. Typically you will be offered a lower than average deposit option or lower interest rates for your mortgage term.
What type of NHS Schemes are available?
As already mentioned there is no such thing as an NHS mortgage but there are schemes out there to make it easier to step into the property market. As an NHS worker you will find that lenders will offer exclusive incentives such as a lower deposit as an incentive to entice NHS workers to their mortgage products.
You may have heard of the key worker mortgage scheme yet this scheme ended in 2019 and no longer exists. It was created to help key workers into accommodation but now there are a range of different schemes instead to offer discounts on mortgages.
Whether you are a first-time buyer or someone looking to invest in a Buy to Let mortgage there will be lenders out there tailoring towards you as a member of the NHS. You can access the same mortgage that everybody else can as well as some Government schemes:
Help to Buy
This scheme was started for first-time buyers. If you gather a 5% deposit, the Government will then give you 20% of the property’s value to put towards your deposit.
If you want to buy but cannot afford to alone, then you can go into a mortgage with shared ownership. You will be able to choose to own between 25% to 75% of the property.
Right to Buy
If you live in a house as a tenant for at least three years then you can qualify for the right to buy scheme. This includes a discount for living in the property, helping you buy your home outright.
New Buy Schemes
This scheme allows borrowers to take out a mortgage with a 5% deposit on new build properties from builders who are taking part in the scheme.
How much can I borrow on a mortgage for NHS Staff?
Typically you will be able to access up to five times your annual salary. This will heavily depend on your current financial situation and your credit rating. It is important to ensure you have your finances in order before applying for a mortgage to make sure you get the most suitable rates that you can.
The amount that you will be able to borrow will depend on your credit rating and the lender’s criteria. It isn’t impossible to find a lender if you have bad credit but it can be difficult. It could be worth seeking the advice of a Mortgage Broker.
How do I prove my income as a Doctor?
If you are an NHS worker underneath the PAYE payroll system then looking into your income history will not be a problem. If you are a locum doctor or self-employed then you will need to be prepared to provide proof of your income.
At least two years’ worth of accounts will be assessed by your lender to determine if you can afford the repayments on your mortgage. You will need to bring along your SA302 forms too to prove that you have paid tax.
If you do not have two years of accounts, there are other specialist lenders out there who will tailor to your needs. It can sometimes be worth waiting for another year to be able to provide these accounts and access lower interest rates.
It is important to be able to afford the mortgage that you are applying for, too many credit checks can actually affect your credit rating. You need to make sure that you can afford the monthly payments on your mortgage. The use of a budget planner can be a good way to see what you might be able to afford.
How can a Mortgage Broker help?
A Mortgage Broker can look into your current situation and give you tailored advice in regards to the right mortgage products for you. There are a lot of different mortgage products out there and a Mortgage Broker has access to all of them. There are more options out there than just high street banks and building societies.
When it comes to finding the discounts, brokers have a keen eye, they will be able to help find the mortgages that are tailored towards NHS workers and ensure that you are getting the most out of the situation you are in.
Mortgage Brokers are appointed representatives who are authorised and regulated by the Financial Conduct Authority. This means that they are qualified to give you financial advice and can access products that others cannot.
Mortgage advisers can also help you to gather any information you might need alongside your application and will make sure you have a clear understanding of what you are committing to.
Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.