Turned down because property is a key worker scheme

misslander69

I applied for a 2 year fixed mortgage with First Direct approx 6 weeks ago. I paid the fee £99 up front to secure the rate (3.49%) and informed them straight away the house we were going for was under a key worker scheme as I work for the NHS.

This basically means the house is put on the market at 70% of the current value of the property but I would own the house outright. The only clause is the house has to be sold on to another key worker if and when I decide to sell.

I had a phone call this morning from First Direct stating they will not allow me to have a mortgage on this property, as if the house was repossessed there would not be enough interest for them to sell the property on (this is not the case but they would not accept this)

I have had nothing but problems with First Direct not knowing their own terms and conditions from day 1, they have constantly had to take queries and get back to me concerning basic details on the mortgage.

I asked could I appeal against their decision as they have said my credit rating is perfect and the ammount I want to borrow is fine. All the person on the phone did was put me on hold for 5 minutes and came back stating it was in their terms and conditions that they could not continue with this type of property and I could not appeal.

I know its a long shot, but has anyone encountered anything like this before and would I benefit from trying to appeal?

Any help or advice would be appreciated.

ILW

Who pays the other 30%?

essexsi_2

Hi Misslander,

I have a property under a keyworker scheme and when I came to re-mortgage, about 6 months ago, I was interested in a First Direct product. When I phoned them about applying they informed me that they do not lend on a property with a second charge on the mortgage. The mortgage would be first charge, but the Housing Association have a second charge to protect their interests. Completely understandable.

I was dissapointed at the time and tried to take it further up the First Direct chain, as no-one on the phone could really explain the circumstances to me. I was eventually informed that they do not like to lend on any keyworker type schemes, which is a little strange as my sister has a keyworker scheme mortgage with their parent company HSBC.

Might not really help but just thought I would tell you.

All the best Si

misslander69

ILW wrote: »

Who pays the other 30%?

No one pays the 30%, the houses are new builds whereby the builders get granted permission from the coucil if they are prepared to set aside a small number solely for key workers at the discounted price (approx 3 in every 60 built).

The builders gain from being granted the permission to built as there is little available land and the area has the advantage of being able to entice skilled workers to the area as the cost of housing here is extremely high.

Berkshiregirl

What % deposit were you putting down? I'm thinking either

a) The product they have is only available at a lower LTV than you've got - perhaps someone somewhere along the line thought you were putting down a 30% deposit rather than you paying a lower figure for the house

or

b) As suggest above they just don't give mortgages when there's a second charge involved.

ILW

Can't you find another property that is 30% cheaper, may not be as nice but at least you will own it?

Mrs_Bumble

You need a lender that is happy with the Keyworker scheme you could seek assistance from an independent mortgage broker or you could try Abbey, Halifax, Nationwide, Woolwich, RBS or C&G, not sure which of these still do accept this type of schem as criteria is constantly changing and I haven't done one for a while.

The broker route might be less hassle as they can ring round and make sure of criteria before application etc.