New build properties are becoming increasingly popular for many people, however there are a number of additional things to consider which our experts can talk you through.
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with everything from the doors, to the carpets, to the drain pipes being brand new.
Purchasing a new build property is incredibly exciting. It is a blank canvas which you can use to build on and create your perfect home and watch as the property is built literally from the ground up.
New build mortgages can come with slightly different lending criteria which our advisers will guide you through, and to help we have included a guide to our most frequently asked questions below.
New build homes typically come with a warranty such as the NHBC 10 year certificate which protects you if there are any defects in the building work, you may be able to choose your own fittings and finishes such as tiles, carpets, kitchen and bathroom which allow you to put your own stamp on the property from day one, and they are often more energy efficient which can help save on your yearly gas and electricity bills.
Your home may be repossessed if you do not keep up repayments on your mortgage.
This list is not exhaustive, especially if you receive bonus / overtime / commission as part of your role or receive government benefits or maintenance income. But as a guide you can expect lenders to ask for the following to help assess and underwrite your application:
Buying a new build can work differently to buying an existing property. We’ll help you understand new build mortgage requirements, deposits, lender criteria and the application process, with expert advice from your first enquiry through to getting the keys.
Put simply, you will be the first person to live in that property, with everything from the doors, to the carpets, to the drain pipes being brand new.
New build homes typically come with a warranty such as the NHBC 10 year certificate which protects you if there are any defects in the building work, you may be able to choose your own fittings and finishes such as tiles, carpets, kitchen and bathroom which allow you to put your own stamp on the property from day one, and they are often more energy efficient which can help save on your yearly gas and electricity bills.
As always this can vary depending on a number of factors, however lenders affordability calculations are often tighter than against traditional new build homes.
Many lenders also require a slightly higher level of deposit, simply because new build properties will often initially drop slightly in value (similar when driving a new car off the garage forecourt), before normally rebounding over the next few years. This protects both you and the mortgage lender.
Absolutely. The main other option is known as Shared Ownership.
Shared Ownership is where you purchase between 25 – 75% of the value of a property, and you then pay monthly rent directly to the Housing Association on the proportion you do not buy. This is very important to consider when figuring out your monthly budget, and mortgage lenders will also take this rental payment as a monthly commitment which can impact affordability.
You are able to purchase an additional stake, or the remainder of the whole property, in the future (this is known as ‘staircasing’).
The other popular option in the past was known as Shared Equity, however this is now the term often used to describe the HTB Equity Loan as outlined above. Some property developers might offer their own shared equity schemes (which work similar to HTB), however these are quite rare and the exact details would need to be checked very carefully by a solicitor.
New build properties are often subject to strict deadlines, with the majority of builders expecting you to exchange contracts (which is where you become legally bound to purchase the property) within 28 days of paying the property reservation fee.
Many builders will often offer a part exchange scheme for your existing home. Whilst you will be offered slightly below an estate agent valuation, you will not have estate agents fees to pay, you will avoid being in a potentially lengthy and complicated chain, and can avoid a great deal of stress on moving day. Our experts have first hand experience of doing this personally so please talk to us about this.
Your home may be repossessed if you do not keep up repayments on your mortgage.
