Discounted mortgages for first time buyers
Up to 500 first time buyers could get the keys to their first home with a new mortgage scheme supported by Nottinghamshire County Council.
Under the Local Authority Mortgage Scheme (LAMS), approved mortgage applicants only have to raise a 5% deposit for their first property. The remainder of the deposit - up to 25% - is underwritten by Nottinghamshire County Council.
This helps first time buyers get much more affordable interest rates - and lower monthly payments - for a much smaller deposit. This helps to bring down the overall cost of buying a house, opening more doors to more people.
Typical example
According to property website Right Move, the current average property price in Nottinghamshire is £122,368.
For a property of that value, a first time buyer using the scheme would need to pay £6,118. The County Council would provide an indemnity equal to £24,473. This would give the applicant access to a mortgage on the same terms as they would get for a 25% deposit.
How to apply
- The Local Authority Mortgage Scheme is delivered by Lloyds Banking Group on behalf of Nottinghamshire County Council
- The scheme is only open to first time buyers purchasing a property in Nottinghamshire worth £150,000 or less
- Find your local branch of Lloyds TSB to apply.
Terms and conditions
Lloyds TSB will assess all Local Authority Mortgage Scheme applicants in exactly the same way they would for any mortgage application. Prospective buyers will still need to be able to afford their mortgage payments. However, by using the LAMS, applicants will only have to find a smaller initial outlay, whilst enjoying the more favourable terms of a 75% mortgage.
The scheme is available in every district of Nottinghamshire apart from Gedling Borough. Gedling Borough already has its own 'Local Lend a Hand Scheme' for first time buyers with Lloyds TSB.
Newark couple feel at home with mortgage support scheme
A young couple from Newark were the first people to be given a helping hand onto the housing ladder by the County Council's new mortgage support scheme.
Buying a dream home together looked like it would be a tough financial challenge for Karl Hopkinson (24) and Lucy Price (23).
But their dream home is now a reality after they were approved for a Local Lend a Hand mortgage, which means they only need to pay a 5% deposit for their first home, but will enjoy the same benefits as someone paying a 25% deposit.
For Karl and Lucy this means their monthly repayments will be around £100 lower than they would otherwise have been and they can use savings to kit out their new home instead of spending them on the deposit.
Karl said: "Applying for the mortgage was very quick and easy. Now we can't wait to get into our new home."
24 first time buyers have already benefited from the Local lend a Hand mortgage scheme, with around £500,000 of funds being used – 25% of the total budget set aside by the County Council.
Case study
An Ashfield woman has joined the housing ladder for the first time, with a little help from Nottinghamshire County Council.
Della Jones (29) is now the proud owner of a house in Huthwaite after signing up for Nottinghamshire County Council's mortgage support scheme, delivered in partnership with Lloyds TSB.
Her Local Lend a Hand mortgage is one of nine to have been completed since the scheme was launched at the end of February, with many more currently being processed.
Della had moved back in with her mum after returning to the Ashfield area from Manchester where she had been living in rented accommodation whilst studying.
She said: "When I found the property I wanted I was really keen to find the best possible mortgage deal and did a lot of looking around to find something which offered the best interest rate and overall repayment amount with monthly installments within my budget.
"The offer I received through the Local Lend a Hand scheme was considerably better than anything offered by any other lender, even better than any of the deals available through a mortgage broker.
"The monthly mortgage repayments are about a third less than what I would have been paying to rent the same house."
Della, who is employed as a support worker for adults with learning difficulties and autism, added: "The fact that I only had to save up a 5% deposit rather than 10%, meant that I was able to afford to move in much quicker than I would have been able to otherwise."
The Local Lend a Hand scheme is open to first-time buyers purchasing a property worth up to £150,000. It enables borrowers to buy their first home with a deposit less than the 10% or greater, required by most mortgage lenders.
Nottinghamshire County Council has set aside £15m for the Local Lend a Hand scheme, which was launched on 26 February this year.
The scheme will help at least 500 first-time buyers in Nottinghamshire to purchase their dream home with a deposit of just 5%.
The fixed rate mortgage products that will be available during this scheme will also be at a lower rate of interest than would normally be available for this level of deposit.
The scheme will help to breathe new life into the county's housing market and provide an economic boost for Nottinghamshire by benefiting a range of businesses which rely on a healthy housing market, from DIY shops and estate agents to furniture stores and plumbers.
Councillor David Kirkham, Chairman of the Finance and Property Committee at Nottinghamshire County Council, said: "I am delighted for Della and wish her every happiness in her first home.
"Her situation is typical of the one facing many people in Nottinghamshire today who have been unable to get on the housing ladder because of high deposits or the high monthly repayments on the few low deposit deals available.
"The Local Lend a Hand scheme provides the best of both worlds; less to save for a deposit and lower monthly repayments.
"The scheme also provides wider benefits to the local economy, not only does it help stimulate home ownership, it benefits numerous businesses that rely on a thriving housing market."
Subject to Lloyds TSB usual lending criteria, the Local Lend a Hand scheme allows borrowers to select any existing property in the area covered by Nottinghamshire County Council up to a maximum loan of £142,500.
First-time buyers put down a minimum 5% of the property price, with Nottinghamshire County Council providing a cash backed indemnity of up to 20% as additional security. The Council then earns interest on this amount.
The first-time buyer owns the property in its entirety and will have access to a range of products at a lower rate of interest than would normally be available for this level of deposit.
Those interested in the local scheme should visit their local branch of Lloyds TSB for more information. Information about the scheme is available at www.nottinghamshire.gov.uk/mortgages
