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What is a new build property?
A new build property is one which has been built in the past 2 years and has never been inhabited.
The appeal of new build homes
New build homes are attractive to buyers because they usually have warranties like the NHBC 10-year certificate that provide the buyers protection in case of any flaws in the structure of the property.
The other appeal is that since the properties are vacant, buyers do not have to wait for anyone to move out before they can move in. This also reduces the purchase time and makes it less complicated.
The added attraction of new build homes is that they can be customised to the buyer’s taste, because they can choose their own kitchen and bathroom fittings, tiles etc.
New build properties are also much more energy efficient than older properties, which leads to long term savings on utility bills.
The best incentive for buying new build homes is the Government’s Help to Buy scheme, which lets you put down a 5% deposit to secure a mortgage.
Getting a Help to Buy mortgage for a New Build Property
If you are thinking of buying a new build property as your first home, the best thing to do would be to speak to one of our expert mortgage advisers. This is because we can work out exactly how much you can borrow based on your unique financial situation. We will also be able to find out if you qualify for the Help to Buy scheme and also source out the best deals from the whole of market for you.
You might qualify for the government’s Help to Buy scheme if the property you have chosen is in England, is not worth more than £600,000 and you only have a deposit of 5% of the property price. It must also be your residence, not an investment property. If you do qualify for the Help to Buy scheme, then the government will lend you a further 20% of the purchase price, making your deposit 25% of the purchase price. As a result, you will need a mortgage of 75% to secure your new home.
Also, if your chosen property is in London, the government can potentially lend you up to 40% of the purchase price.
Another perk of the Help to Buy scheme is that for the first 5 years, you will not have to pay any fees on the Government loan. After that you will have to pay an annual charge of 1.75%, which will increase every year by the rate of inflation plus 1%.
At Ever North Mortgages Limited, we can all the work to find out your eligibility, then if you are eligible we can prepare your paperwork for your application and see it through till you have received your offer from your chosen lender.
Buying ‘Off Plan’ New Builds
Buying off plan means when you want to buy a new build property that has not been built yet. You can get an idea of the finished property by visiting a show home and looking at the plans for the property.
However, buying off plan means that you will not be able to move in immediately, but will need to wait until the property has been finished, which takes months or a couple of years. You will need to secure a mortgage before you can exchange contracts.
Also, you will need to pay a deposit to the developers, known as the ‘reservation fee’, to book the plot for the property of your choice. Some developers will only give you 4 weeks to exchange contracts after you have paid your deposit. This means that you will need to have your mortgage in place by then.
Securing a mortgage within such a short span of time is difficult, but here at Ever North Mortgages, we specialise in moving fast. Our mortgage experts liaise with the lenders and get new build mortgages approved in record time. We coordinate between the lenders, developers and solicitors to make sure that everything happens on time and you get the home of your choice.
We are experts at processing new build mortgages and we have access to deals that are not available directly from lenders. Also, since we have access to the whole of market, we can source out the best new build mortgages in the shortest time.
Incentives offered to New Build Buyers
A lot of builders and developers will offer inducements like free removal services or paying off your stamp duty to encourage you to buy new build properties.
These incentives sometimes have an impact on how much you can borrow. When lenders assess your application, they might reduce your loan amount if the value of your incentives is more than 5% of the property value. Your interest rates may also go up.
One of our expert mortgage advisers will be able guide you on the effect of these incentives on your mortgage.
How The Purchase of a New Build Property Works
- Step 1 – Call us to talk to an expert mortgage adviser and find out how much you can borrow and whether you are eligible for the Help to Buy scheme. We will also check to see what other good mortgage deals are out there for you.
- Step 2 – Find a property you like, make an offer to the developers and check to see if they have any buyer incentives.
- Step 3 – Speak to your mortgage adviser to check if you can afford the price of the property and whether the incentives will have any negative impact on your mortgage application.
- Step 4 – Pay the reservation fee to the developer to book your property.
Step 5 – Speak to your mortgage adviser, who will then look for the best mortgage deal for you. Once you have selected your preferred mortgage deal, your adviser will ask you for the documents that the lender will require, then make the mortgage application on your behalf.- Step 6 –Instruct a solicitor for your conveyancing. If you prefer, we can do this for you.
- Step 7 – Once the lender has assessed your affordability and carried out a survey of the property, they will give you your mortgage offer.
And remember, the services of Ever North Mortgages is completely FREE!!