Mortgages for new build property

Many attractive qualities attract first-time buyers to a new build property. Fresh woodwork and paint, latest appliances and amenities. Modern bathrooms, sleek kitchen designs and better energy efficiency. What’s not to like?

As well as those, buyers can find many incentive schemes on new build homes, including:

• Government Help to Buy Scheme
• Shared Equity Ownership
• 95% mortgage options (5% deposit mortgages)
• Property developer freebies and discounts
• Part exchange

Getting a mortgage for a new-build property is not that straightforward, though. Especially if you’re looking to buy a flat rather than a house.

Another important thing to note is if you’re buying off-plan (before your home is built). You’ll need a mortgage offer that will still be valid when the property build is complete.

When should I apply for a new build mortgage?

That’s not to say you shouldn’t enquire about buying off-plan. But do consider timing. Check the offer expiry date against the developer’s plans for having the property ready. You may not be eligible for the same offer further down the line.

Your mortgage offer will typically be valid for six months. Make sure you go with a lender with the flexibility to extend their offer. Delays in finishing the property could have serious consequences. The last thing you need is to have to reapply to a new lender and be unsuccessful.

Loan-to-Value restrictions for new build mortgages

Mortgage providers are generally stricter on the loan-to-value percentage for new-builds. This is to protect themselves from potential devaluation in the early years.

Most lenders will only offer 85% LTV for a newbuild home (15% deposit). This ratio can go down as low as 70% (30% deposit) for a flat. Either could pose a problem for borrowers who can’t find large deposits.

Beware of dodgy developers

Make sure that you do your due diligence and research on the developer. You can get a lot of information by just going online. Read reviews and visit other sites they have recently completed.

Exclusive 95% new build mortgages

Only got 5% deposit? That need no longer be a problem. The government launched the New Build scheme with 5% deposit holders in mind. Since its launch, the help to buy equity scheme has proven the most popular and successful.

You own 100% of your home with the help of up to a 15% equity loan from the government. In effect, you’re borrowing more than you otherwise could. But the ‘equity loan’ is interest-free for 5 years, helping many first-time buyers get a mortgage.

Mortgage Quest – finding you the right new build mortgage

We are a team of mortgage experts with years of experience. Our network can help you get a new build mortgage quickly and efficiently:

• Based on what we know about you, we match you to the best possible lender;
• We prime the lender so that your mortgage is ready to move when you are;
• We may even be able to help if your credit history isn’t the best.

To find out more about the new build mortgage opportunity, call us on 0208 421 7998 or enquire now.