A MORTGAGE scheme designed to help first-time buyers on to the property ladder will be launched today (Thursday).
Lloyds TSB and South Kesteven District Council will join forces to help first-time buyers purchase a home with a deposit of just five per cent.
The ‘Local Lend a Hand’ product will be available in the Grantham branch of Lloyds TSB, in St Peter’s Hill, from today.
SKDC has initially set aside £1 million which should help 30-40 buyers on to the property ladder. The scheme enables borrowers to buy their first home with a deposit less than the 10 per cent required by most mortgage lenders. 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.
Council leader Linda Neal said: “We know that lots of local people can afford monthly mortgage payments but cannot move into the market because they haven’t got the deposit.
“If you take a house with a relatively modest asking price these days, say of £100,000, that means that the potential purchaser often needs a deposit of at least £10,000. Not too many people starting out in the housing market have got that sort of cash and that is where we can help.”
Stephen Noakes, mortgages commercial director, added: “We know that many young people turn to the Bank of Mum and Dad to get their foot on the ladder, but that’s not a solution for everyone.”
Subject to Lloyds TSB’s usual lending criteria, borrowers are able to select an existing property in the district, excluding new builds, up to a maximum loan of £118,750.
First-time buyers will put down five per cent of the property price, and SKDC will provide a cash-backed indemnity of up to 20 per cent as additional security. The local authority 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.
To find out more, call into Lloyds TSB.