New Build Mortgages

1.     Premium Pricing

New build homes often come with a higher price tag compared to older properties in the same area. Buyers should carefully consider their budget and evaluate whether the premium cost aligns with their needs and long-term financial plans.

2.     Construction Delays

Sometimes, the completion of new build properties can face delays due to factors like weather conditions or unforeseen challenges. Buyers need to be prepared for the possibility of moving-in dates being pushed back.

3.     Development Phases

Buying a property in a new development means living in an area that may still be under construction. Consider potential noise, disruption, and inconvenience during ongoing development phases.

4.     Limited Character and Established Surroundings

New build developments may lack the character and charm associated with older, established neighborhoods. Additionally, local amenities and infrastructure might still be in the early stages of development, requiring patience as the community grows.

5.     Potential Snagging Issues

As with any new construction, there is a possibility of minor issues or defects arising after moving into a new build home. Buyers should familiarize themselves with the builder’s snagging process and ensure any necessary repairs are addressed promptly.

The loan-to-value (LTV) ratio is a crucial factor in new-build mortgages. It represents the percentage of the property’s value that is being borrowed. Lenders use the LTV ratio to assess the level of risk associated with the mortgage.

It’s important to note that a higher LTV ratio may result in higher interest rates and potentially impact affordability. Therefore, buyers should carefully consider the long-term financial implications and evaluate their ability to comfortably repay the mortgage.

Yes, there are several government schemes and incentives available for new build mortgages in the UK. These include:

• First Homes: Discounted properties for local first-time buyers, key workers, and veterans. More information can be found here.
• Shared Ownership: Purchase a share of a property and pay rent on the remaining share, ideal for buyers with smaller deposits. Click here for more information.
• Lifetime ISA (Individual Savings Account): Save for a first home and receive a government bonus on contributions. Find out more here.
• Mortgage Guarantee Scheme: Access higher loan-to-value mortgages with a deposit as low as 5% through a government guarantee to lenders. Read more here.
• Deposit Unlock Scheme (95% mortgage scheme): Unlock funds from pensions or investments to use as a deposit for purchasing a new build property. More information can be found here.

Each scheme has specific criteria and eligibility requirements. It’s important to research and understand the details of each scheme to determine if they are suitable for your circumstances.

When applying for a new build mortgage in the UK, you will typically need to provide the following documentation:

• Proof of Identity: Valid passport, driving license, or national identity card.
• Proof of Address: Utility bills, bank statements, or council tax statements showing your current address.
• Proof of Income: Payslips, bank statements, or tax returns to demonstrate your income and affordability.
• Employment Details: Employment contracts, employer references, or self-employment accounts if applicable.
• Bank Statements: 3 months worth of bank statements to assess your financial stability.
• Deposit Evidence: Bank statements or a gift letter if the deposit is coming from a family member.
• Property Information: Details of the new build property, including the purchase price, developer information, and any incentives or schemes involved.

These are general requirements, and specific lenders may have additional documentation requirements. It’s advisable to consult with your chosen lender or mortgage advisor for a comprehensive list based on your circumstances.

Yes, there are several government schemes and incentives available for new build mortgages in the UK. These include:

• First Homes: Discounted properties for local first-time buyers, key workers, and veterans.
• Shared Ownership: Purchase a share of a property and pay rent on the remaining share, ideal for buyers with smaller deposits.
• Lifetime ISA (Individual Savings Account): Save for a first home and receive a government bonus on contributions.
• Mortgage Guarantee Scheme: Access higher loan-to-value mortgages with a deposit as low as 5% through a government guarantee to lenders.
• Deposit Unlock Scheme: Unlock funds from pensions or investments to use as a deposit for purchasing a new build property.

Each scheme has specific criteria and eligibility requirements. It’s important to research and understand the details of each scheme to determine if they are suitable for your circumstances.

When selecting a lender for your new build mortgage, consider the following factors:

• Experience with New Build Mortgages: Choose a lender with expertise in financing new build properties.
• Interest rates and terms: Compare interest rates, repayment terms, and overall mortgage packages offered by different lenders.
• Lender’s reputation and service: Research the lender’s reputation, customer service, and responsiveness.
• Incentives and offers: Explore if the lender provides any incentives or exclusive deals for new build mortgages.
• Mortgage advisor recommendation: Seek guidance from a mortgage advisor who can recommend suitable lenders based on your needs.

Carefully review and compare terms and conditions, fees, and potential penalties from different lenders before making your decision.

As a first-time buyer, there’s a great range of first-time buyer mortgages to suit your circumstances and your budget and to help you get on the first rung of the housing ladder.

As you’re new to the housing market, you may well be offered incentives or cashback schemes to encourage you to apply for a mortgage with them. The deposit you’ll need for a first-time buyer mortgage could be as low as 5% although, again, you’ll need to meet the relevant criteria to show you can afford your mortgage repayments.

You’ll also need to consider what type of first-time buyer mortgage will be right for you. There are several that you might be offered – your mortgage adviser will be able to talk you through the mortgage product that’s right for you, but here are the key features of each:

• A fixed-rate mortgage is a sensible option for first-time buyers because you’ll pay the same monthly payment for as long as your fixed-rate period lasts. After that you can apply for a remortgage to secure another good deal. If you overpay or leave the deal early, you’re likely to pay a penalty, but the rates are usually lower than a variable rate deal.
• Variable rate mortgage monthly repayments are linked to the bank base rate so, when rates are low, your repayments will be low too, but you’ll pay the price should rates rise. Tracker mortgages and discounted rates are also guided by the bank base rate.
• Offset mortgages offset the interest on your savings against your mortgage – talk to your mortgage adviser to check if this is the best use of your savings.
• A repayment mortgage means that every monthly payment you make will go towards paying the capital sum you’ve borrowed until you own your home outright.

Interest rates for new build mortgages vary depending on factors such as the lender, your creditworthiness, loan-to-value ratio, and market conditions. Generally, new build mortgages can offer competitive interest rates, especially with a good credit history and a significant deposit.

To determine the interest rates available to you, it’s essential to obtain personalized quotes from different lenders based on your specific circumstances and current market conditions.

Yes, it is possible to use a new built mortgage for self-build projects or custom-built homes. However, the availability of such mortgages may vary among lenders. It’s important to find a lender who specializes in self-build mortgages or offers suitable products for custom-built properties.

These mortgages typically release funds in stages as the construction progresses, and the lender may require additional documentation and inspections to ensure the project is progressing according to plan.

While new build mortgages offer many benefits, there are potential downsides and risks to consider:

• Construction Delays: New build projects can face unexpected delays due to factors like weather, planning permission, or supply chain issues. Delays can disrupt your moving plans and potentially impact the timing of your mortgage approval.
• Snagging Issues: New build properties may have minor defects or issues that need to be addressed by the developer. It’s important to familiarize yourself with the snagging process and ensure that any necessary repairs are completed satisfactorily.
• Limited Choice: New build homes are often part of larger developments with a limited range of property styles and sizes. If you have specific preferences or a desire for a unique property, a new build development may not offer the level of choice you’re looking for.
• Potential Changes in Surroundings: When purchasing in a new development, the surrounding area may still be under construction or subject to future development plans. It’s important to research and consider how these changes might affect your living environment in the long run.

The valuation process for new build properties during a mortgage application typically involves the following:

1. Independent Valuation: The lender will instruct an independent valuer to assess the property’s value. The valuer will consider factors such as the location, size, quality, and market demand for similar properties in the area.
2. Stage Valuations: For off-plan purchases or self-build projects, valuations may occur at different stages of construction to ensure the loan release aligns with the progress of the property.
3. Final Valuation: Once the property is complete, a final valuation is conducted to confirm its value and suitability for the mortgage.

The valuation is an essential part of the mortgage process, as it helps the lender determine the maximum loan amount, they are willing to provide based on the property’s value.

Yes, there may be specific restrictions or conditions when choosing a new build property for a mortgage. These can vary depending on the lender and the specific development. Some common restrictions and conditions may include:

1. Approved Builders: Lenders may have a list of approved builders or developers from whom they are willing to provide mortgages. Ensure that the developer of the new build property you’re interested in is on the lender’s approved list.
2. Property Warranty: Lenders often require new build properties to have a recognized warranty, such as the NHBC (National House Building Council) or another approved warranty provider. This warranty ensures that the property meets certain quality standards and offers protection against potential defects.
3. Timing of Mortgage Offer: Some lenders have time limits on mortgage offers for new build properties. This is to ensure that the valuation and other factors remain up to date. Make sure to discuss any timing considerations with your lender.
4. Leasehold and Ground Rent: If the new build property is leasehold, lenders may have specific requirements regarding lease length, ground rent charges, and service charges. It’s important to review the lease terms and ensure they meet the lender’s criteria.

Always consult with your mortgage advisor or lender to understand any specific restrictions or conditions that apply to the new build property you’re considering for a mortgage.

Yes, it is possible to use a new build mortgage to purchase a property that is still under construction. Lenders often offer mortgages specifically designed for off-plan purchases or properties in the early stages of construction. These mortgages usually release funds in stages as the construction progresses, allowing you to secure the property before its completion.

If there are delays in the completion of a new build property while your mortgage application is in progress, the following scenarios may occur:

1. Mortgage Offer Extension: If the construction delay is minor and the lender agrees, they may extend the validity of your mortgage offer. This allows you to proceed with the purchase once the property is ready.
2. Reassessment of Mortgage Offer: If the construction delay is significant or exceeds the lender’s tolerance, they may need to reassess the mortgage offer. This reassessment ensures that the valuation and other factors remain accurate and up to date.
3. Communication with Developer: The lender may communicate with the developer to gain a better understanding of the construction timeline and any potential risks or issues that may affect the mortgage.

It’s important to maintain open communication with both your lender and the developer to stay informed about the progress of the property and address any concerns or changes that may arise during the construction period.

Yes, there may be additional costs or fees associated with new build mortgages. Some common ones include:

1. Reservation Fee: Some developers require a reservation fee to secure a new build property. This fee is usually non-refundable and contributes towards the cost of reserving the property for you.
2. Mortgage Arrangement Fee: Lenders may charge a fee for arranging the mortgage. This fee can vary among lenders and is typically paid upfront or added to the mortgage balance.
3. Valuation Fee: The lender may charge a valuation fee to assess the property’s value and suitability for the mortgage. This fee can vary depending on the property’s price and complexity.
4. Legal Fees: You will need to engage a solicitor or conveyancer to handle the legal aspects of the purchase. They will charge fees for their services, including searches, title transfers, and other necessary legal work.
5. Stamp Duty Land Tax (SDLT): SDLT is a tax payable on property purchases above a certain threshold. The amount depends on the property’s value and your circumstances. However, there may be exemptions or reduced rates for first-time buyers or certain government schemes.

It’s essential to review the mortgage offer and consult with your solicitor or conveyancer to fully understand all the costs and fees associated with your new build mortgage.

The application and approval process for new build mortgages can vary depending on various factors, including the lender’s processes, your circumstances, and the complexity of the development. Generally, the process can take several weeks to a few months.

Here’s a general timeline:

1. Mortgage Application: The application process involves gathering documentation, completing application forms, and submitting them to the lender. This typically takes a few days to complete.
2. Mortgage Offer: Once the lender receives your application, they will assess your eligibility, conduct a valuation, and review the necessary checks. If everything goes smoothly, they will issue a mortgage offer. This process usually takes a few weeks.
3. Exchange of Contracts: After receiving the mortgage offer and finalizing legal work, your solicitor or conveyancer will coordinate the exchange of contracts. This step confirms your commitment to purchasing the property.
4. Completion: Completion occurs when the construction is finished, and you can take ownership of the property. This can happen several weeks to several months after the exchange of contracts, depending on the construction progress.

It’s important to note that these timelines are approximate, and individual circumstances may affect the overall duration. It’s recommended to consult with your chosen lender and solicitor to get a more accurate estimation based on your specific situation.

Typically, new build mortgages are designed for owner-occupiers rather than buy-to-let properties or investment purposes. However, some lenders may offer specialized buy-to-let mortgages for new build properties.

These mortgages often have different criteria, rates, and terms compared to residential new-build mortgages. It’s advisable to consult with lenders or mortgage advisors who specialize in buy-to-let mortgages to explore your options.

Making changes or modifications to a new build property after purchasing it with a mortgage usually requires approval from the developer or relevant authorities. The specific process and regulations may vary depending on the nature of the changes and local planning regulations.

It’s important to check the terms and conditions of your mortgage and consult with the developer or a professional architect or builder before making any modifications. Certain alterations may require consent or may affect the warranty or guarantee on the property.

Yes, new build properties often come with warranties or guarantees provided by the developer. The most common warranty is the NHBC Buildmark, which is offered by the National House Building Council (NHBC) in the UK. This warranty typically covers the structural integrity of the property for a specified period, usually 10 years.

Additionally, developers may offer their own warranties or guarantees, which can vary in terms of coverage and duration. These warranties typically provide assurance for defects or issues that may arise within the early years of the property’s life.

When it comes to mortgages, the warranty or guarantee on the property may be considered by lenders during the mortgage application process. They may require proof of a valid warranty and take it into account when assessing the property’s value and suitability for the mortgage.

If you’re a first-time buyer and you’re saving for your first home, you’ll want to know how much deposit you’ll need to get together as early on in the process as possible.

Just to clarify – you’ll be classified as a first-time buyer if you’ve never owned a property, either freehold or leasehold in the UK or abroad.

In most cases, you’ll need to have a deposit of between 5% and 20% of the cost of your first home. The more you save, the less you’ll need to borrow. By having less to borrow, the greater access you’ll have to more mortgages with better rates as you’ll be a less risky investment for lenders.

The difference between the deposit you’ve saved and the first-time buyer mortgage you need is known as the loan to value (LTV) ratio – the higher your LTV, the higher the interest rate you’re likely to pay.

Remember there are other costs associated with buying a new home. You’ll need to pay solicitor’s fees, survey and search costs, mortgage arrangement and valuation fees, buildings insurance and removals costs. As a first-time buyer, you don’t have to pay Stamp Duty on the first £300,000 for homes worth up to £500,000.

There are many different Government-led schemes to help first time buyer get onto the property ladder. These include 95% mortgages, First Home Scheme, Shared Ownership and more. Be aware that schemes for England, Greater London, Wales and Scotland, and they all vary.

Buying your first home can be as nerve-wracking as it can be exciting, so talk to our team of expert mortgage advisers about your options and we’ll guide you through the process. Call us on 03454 500200 or click here to make an enquiry.

When you’ve made the decision to move to a new home or remortgage your existing property, getting the mortgage deal is likely to be at the top of your list of wants. By far the most effective way of securing a good mortgage rate from a trusted provider is to talk to an expert mortgage advisor. A good mortgage specialist will have access to the most competitive rates available on the market and be able to find a deal that’s the right fit for you and your circumstances.

Before you start house-hunting, you’ll need to do some groundwork to assess how much you can afford to spend on your new home – remember to include your deposit, legal fees and Stamp Duty, etc. When you have an idea of what you need to borrow, you can then work out what your mortgage payments are by using our mortgage repayment calculator.

By talking to a specialist mortgage adviser early on in the process, you’ll get all the advice you need on the mortgage product that’s right for you. Your deposit, your age and having a joint borrower may determine the rate and the term of your mortgage.

You’ll need to decide which type of mortgage you’d like, such as a fixed-rate, variable rate, first-time buyer, repayment or interest-only mortgage. There may be fees, penalties and, of course, incentives available that could also sway you towards a particular product too.

When you’ve found the right mortgage product, your mortgage adviser will get the ball rolling and, when you’ve found your dream home, the next exciting step will be to make your offer.

No matter where you are in the house moving process, talk to our team of expert mortgage advisors and we’ll guide you through it all. Call us on 03454 500200 or click here to make an enquiry.