As specialists in new build property mortgages our expert advisers understand the complexities of how the new build property market works. It has systems that do not cross over with any other form of mortgage lending.
There are also pitfalls that a lot of new build property buyers can fall into if they do not understand the process in its entirety.
New build developers have requirements that need to be met by you, the buyer, along the way and failing to meet these could have serious consequences on your purchase.
Our advisers will outline these through your mortgage application giving you the full knowledge that you deserve.
Specialist New Build Mortgages
A specialist mortgage isn’t always necessary if you’re looking for a mortgage on a new build, however it’s a good idea to approach a mortgage broker. They often have access to deals that you won’t be able to find yourself and can be very helpful when it comes to arranging a new build mortgage. Furthermore, if you encounter issues such as the mortgage offer expiring before you complete, they’ll be able to help you get another offer secured.
How your property type can impact your mortgage borrowing?
Mortgage lenders are often a lot stricter on the amount they are willing to lend on the purchase of new-builds in order to protect themselves from the inevitable devaluation of the property in the early years.
The loan-to-value ratio for new build mortgages is also often tiered, with lenders prepared to loan you less for a new build flat than a new build house.
This means that if you’re looking for a new build mortgage on a flat, you may need to be prepared to save up a bigger deposit than if you were buying a house. You could also consider the help to buy equity loan or see if you qualify for any shared ownership schemes.
How quickly will a new build developer expect me to move?
Developers can often work to demanding timescales, and once you’ve put down a deposit you may have only 28 days to exchange. That can be a challenge for mortgage lenders, who may struggle to complete your application within that time frame. The best way to counter this is to prepare so that you increase your chances of making a successful mortgage application, and submit the application as soon as you can.
Mortgage offer periods
Buying a new build off plan (before it’s built) shouldn’t present any problems in itself when getting a mortgage as most lenders are familiar with this scenario. There may however be an issue around how long your mortgage offer is valid for. It varies by lender but most are only valid for six months. In other words you have six months from mortgage offer date to complete on your home purchase.
If as time goes on you think your new home isn’t going to be ready within that time you may be able to get the lender to extend the offer during the period, but in most cases your mortgage application will need to be re-assessed by starting your application all over again.
Recognising that many new build projects can be subject to delays, some lenders have special new build mortgages, with a longer validity period that can be up to three months longer than their usual deadlines. The best thing to do is check with a mortgage broker as they will know the products which will remain valid for longer and will also be on hand should you need to move quickly to re-apply or find an alternative lender.
Nicholson Brown Limited is authorised and regulated by the Financial Conduct Authority under register number 671013.
Your home (or property) may be at risk of repossession if you do not keep up repayments on your mortgage or loan secured upon it.
We do not charge for our initial consultation, however we charge a brokerage fee for residential and buy to let mortgage applications. The fee is dependent upon the complexity of your case and is typically up to £500, payable upon completion of the transaction.
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