DMS Mortgage

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Author: Elliott Culley - Director & Mortgage Adviser of Switch Mortgage Finance

What is a DMS Mortgage?

A DMS mortgage (discount market sales) is a low cost home ownership option where you can buy a new build or existing property at a discounted price from a local council participating in the scheme in collaboration with property developers.

It is similar to the First Home Scheme set up by the Government to support first time buyers gain access to the property ladder.

Are There Lenders who Offer DMS Mortgages?

Yes there are lenders that offer this type of mortgage. You would need to pass their underwriting criteria and the loan must be affordable.

Lender’s will require a mortgagee exclusion clause in built into the sale so that if they needed to sale the property they could do so for full price. 

Is it Hard To Get a DMS Mortgage?

Not all mortgage lenders offer DMS mortgages and the ones that do have differing criteria. You need to make sure you approach the right lender. The details of the particular scheme you are applying for can affect which lender will be suitable.

How Much is the Discount Usually?

The discount is usually around 20% – but may be as high as 50%

Speak to an Expert!

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Contact us today for expert advice and guidance on your unique mortgage and property needs. We will work with you on a one-on-one to basis to help you find the right solution for your needs.  

With our experience you can rest assured that you are in good hands when it comes to securing the financing you need for your property.

How Much Deposit Do I need For a DMS Mortgage?

There are mortgage lenders available who only require a 10% deposit of the discounted price you are paying. The higher the deposit you can put down the cheaper the interest rate will be and you will also have access to more mortgage lenders.

How Do I Qualify for a DMS Property?

To qualify for one of these properties you will need to meet the criteria of the local authority. This can include such things as, not owning a property already, being a local resident or earning a certain level of income. 

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Do I Have to Pay Stamp Duty?

Stamp duty is applicable, but you are able to benefit from stamp duty exception. As a first time buyer you would have access to a higher level of discount.

What Happens If I Want to Sell My Property?

When you decide to sell the property, the same discount applied when you bought it will apply to when you sell it. This allows the property to be continuously used to assist borrowers in your situation.

Can I get a DMS Mortgage with Bad Credit?

Yes it is possible to get a mortgage even with bad credit. It would completely depend on the severity of the bad credit, and your current position. It is always worth enquiring to see what your options are. 

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