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Your guide to getting a new build mortgage
If you’re looking to buy a new build home, the first thing you’ll no doubt consider will be what you can afford to buy. And for that you’ll need some some new build home mortgage advice. With this in mind, we have put together this guide to getting a new build mortgage.
We have a team of mortgage advisers who are experts in new build mortgages. If you have any questions, why not get in touch?
What is a new build mortgage?
Most lenders class a new build as something that has been built, and not sold, within the last two years. You’ll apply for a new build mortgage in a similar way to a normal mortgage. However, the process can be more complex.
If you’re getting a new build mortgage there are several things you need to consider:
- Your lender will need to know that you are buying a new build. This is because you may need a mortgage that is arranged with a long delay between exchange and completion. Otherwise, there’s a risk that your mortgage offer might run out before your home is ready to move in to and then you’ll need to start the process again.
- With new build homes you often only have 28 days from reserving the house to exchanging. So the sooner you speak to your mortgage adviser to start the application process, the better.
- With most new builds you will need to put down a reservation fee to secure your property. You need to consider this within your overall affordability.
Our team of expert mortgage advisers can guide you through the new build process. We know which lenders have extended offer periods. We can also advise you on which lenders will be able to move swiftly in order to meet the 28 day exchange deadline.
If our guide to getting a new build mortgage has raised any questions. Or if you think you are ready to start the process to buying a new build home. Get in touch today to talk about new build home mortgage advice.
What’s the mortgage process for buying a new build home?
Getting a mortgage for a new build home is similar to getting a mortgage on an older house. There’s just a few things to be aware of. In our guide to getting a new build mortgage we’ll go through all this to ensure your journey to getting a new build home is as easy as possible.
Here’s our step-by-step guide to getting a new build mortgage.
- Speak to an adviser. We’ll crunch the numbers and work out how much you’ll be able to borrow, and we’ll explain the application process too.
- Choose a mortgage product and complete a decision in principle with the mortgage lender.
- Start house hunting. Once you’ve found the house of your dreams, it’s time to make an offer. To secure the property you’ll usually need to pay a reservation fee.
- Apply for a mortgage. With new build homes you often only have 28 days from reserving the house to exchange. So the sooner you speak to your mortgage adviser to start the application process, the better.
- Think about protection. Consider what protection you need, such as life insurance or income protection. Our expert advisers can talk through the different types with you
- Getting ready to exchange. Once you have your mortgage offer and the legal work is completed, you’ll be ready to exchange.
- Complete and move in. Once the home is finished, you can get the keys and move in! Congratulations, you did it!
To start the process, why not get in touch with us today.
Schemes to help you buy a New Build Home
If affordability is an issue, you may need some advice on the schemes available to help you purchase a New Build Home. There are three main schemes available to help which are as follows:
Help to Buy Equity Loan Scheme
You’ll need to put down a minimum deposit of 5%, and the Government will lend you up to 20% of the property’s value (or up to 40% if you’re buying a house in London). You’ll then need to take out a mortgage for the remaining amount. The scheme is only available to first time buyers, and regional price caps on the value of the property apply.
With Shared Ownership, you buy a share of a house or flat, usually a minimum share of 25%, and you’ll pay rent on the remaining share. As you’re only buying a percentage of the house, you’ll need a smaller mortgage and deposit, so this could be a good option if you’re on a tight budget. After you’ve moved in you can buy a bigger share of your home. This is known as ‘staircasing’.
This scheme allows first time buyers and home movers to buy a new build home with just a 5% deposit. It’s available across England, Scotland and Wales from participating builders, and is exclusively for new build homes only.
Our experienced team understand all the schemes available to help you purchase a new build. We can talk you through all the options and help understand whether you are eligible for the schemes.
New build buyer incentives
Some developers offer new build incentives. These might include having your stamp duty or legal fees paid or other incentives to entice you to buy. Lenders will take these incentives into account when considering how much to lend you.
New Build incentives can reduce the amount you will be able to borrow. Our team will be able to advise you as to whether new build incentives will impact on your mortgage.
Things to consider when buying a new build home
While not directly related to your mortgage, there are other areas that you might want to consider when you’re buying a new build home. We have a great deal of experience with new build clients so thought we would share these with you.
- Research is key
When you find your dream new build home, make sure you take a little time to do some research before making an offer. The National New Homes Customer Satisfaction Survey on the Home Builders Federation website is a great place to start as it rates developers based on what real customers think.
- What’s the area like?
Check if the location suits your needs. Does it have good transport links? How long will your commute to work take? And are there good schools nearby?
- Are you buying ‘off plan’?
This means buying a new build home that hasn’t been built yet. Check whether you can choose aspects of the design yourself, and make sure you clarify exactly what’s included in the price, such as white goods.
- Reservation fees
With new build homes, you’ll usually need to pay a fee to reserve the house.
- Don’t forget insurance
Most new build properties come with a 10-year protection warranty issued by the National House Building Council (NHBC), should there be any major defaults in the building work. Your appliances will have warranties too, but you’ll still need home insurance to protect against damage like flooding.
Why choose Your Mortgage Expert?
Your Mortgage Expert is a highly rated, family run mortgage broker based in Salisbury. But we can help you no matter where you live in the UK. Our highly experienced team understands the often complex process for getting a new build mortgage. We can help explain the whole process for you and will be by your side every step along the way. We can also put you in touch with our local business partners to help you with your application. We can recommend solicitors, estate agents, removal companies and more.
If you have found this Guide to getting a new build mortgage useful, get in touch today to talk about new build home mortgage advice.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 2% but a typical fee is 0.6% of the amount borrowed.
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Max and Martha, First Time Buyer customers from Cardiff
“Being in the Armed Forces I am away a lot, meaning it can be hard to attend meetings, answer emails and especially hard to fill in forms. Adam and his team were extremely helpful and understanding of our situation and provided help wherever they could. After our initial meeting where we provided our required details, we actually did very little of the hard work, apart from signing a couple of papers.”
Callum and Verena, First Time Buyer Armed Forces Mortgage Customer from Salisbury
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Andrew and Helen, Armed Forces Mortgage Customers from Salisbury
“Even though we were used to having a mortgage on the rental property, paying a mortgage on your own home was still a bit of a shock after years of having married quarter rental deducted from your pay at source. But, at every step along the way, we felt reassured, understood and that we really mattered to Adam. Trust is an important concept for military families and we trusted Adam.”
Fiona and Graham, Armed Forces Mortgage Customers from Wilton
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Andrea, Contractor Mortgage Customer from Warminster
“I am a contractor, therefore require specialist mortgage advice. Adam has now concluded two mortgages for us (new mortgage then a contractor remortgage), and is currently arranging a buy-to-let mortgage for us. He also arranged our life insurance for us. We keep returning to him for some great reasons – he is always available, and ready to help. He provides great advice, and always ensures that he meets our requirements exactly. He is prepared to explain things in such a way that even a lummox like me can understand, and his level of service has remained consistently good over the last three years.”
Matt, Contractor Mortgage Customer from Southampton
“Adam’s advice on the different types of critical illness and life insurance were really useful. He also worked with us to decide the best combination of policies that would work with our existing policies to cover our needs. When doing this he happily tweaked quotes for us until we came out with an arrangement that was both affordable and would provide us with the level of cover we thought appropriate.”
Hannah and Steve, Protection Insurance Customers from Stamford
“Adam provided us with factual advice and also with options of which we were unaware. The advice on gifted equity was something we hadn’t heard about and this assisted us hugely to ensure repayments worked within our affordability. He provided us with a very personal service that made the journey from initial call, to mortgage offer and completion hassle free. We have already recommended Adam to someone and will continue to recommend his services in the future.”
Saul and Laura, Home Mover Mortgage Customers from Salisbury
“Mike and I collected the keys to our flat this weekend and we couldn’t be happier. It’s been a long time coming but we got there! We just wanted to say a MASSIVE thank you for everything you have done for us so far. We’ve really appreciated all the help, advice and reassurance you’ve given us all the way through this process. It’s really nice to have a friendly voice on the other end of the phone.”
Mike and Bethan, First Time Buyer Mortgage Customers from London
“Without question Adam found me a deal the estate agent’s broker couldn’t. He was very easy to contact whenever I needed him and he took time to explain the ins and outs of the Help to Buy equity loan scheme mortgage that he found me. I would rate him five out of five and will be back to use him when the time comes to remortgage or move.”
Chris, Help to Buy Mortgage Customer from Southampton