New Build Mortgage

Even when you’ve been approved for a mortgage in principle, finding the perfect home for your needs can still be a challenge. After all, homes and mortgages are long term commitments. Buyers need to consider not just today’s needs but tomorrow’s as well. In a turbulent housing market, many cautious buyers gravitate toward new build properties.

5 things to consider when buying a new build house.

• Construction Timeline: This question plays a pivotal part of choosing the correct lender from the beginning. Most lenders will allow for 6 months to complete on the mortgage. This also gives you the understanding of how long it will take to complete the build.
• Builder’s Timeline: Quite often, the time line given when initially choosing the property can vary from what the builder actually needs. For instance, off-plan purchases, if the builder requires more time to finish construction, we need to make sure we have selected a lender that permits mortgage offer extensions. Extensions ranging from two weeks to six months are possible, whilst preserving your interest rate.
• Deposit Amount: A larger deposit results in lower lending requirements, leading to more affordable monthly payments. Deposits of 10% to 15% are typical for new build properties, though some lenders may accept 5% depending on circumstances.
• Builders Incentives: New build developers offer incentives like cash contributions toward the deposit or white goods purchases. Account for the incentive’s cash value when choosing a lender, as allowable amounts differ between 0% and 15% based on the lender.
• Difference between timber frame and block and brick houses: Both have their own advantages and disadvantages, Timber frame houses are constructed using a wooden framework made of vertical posts (studs) and horizontal beams. The spaces between the framing members are usually filled with insulation materials. Block and brick houses are constructed using masonry materials such as concrete blocks, clay bricks, or stone. These materials are stacked and bonded together with mortar to form walls.

What is a new build home?

New build homes have a very specific definition. The term applies to a home that has been built in the past 2 years and has never been sold previously. The term may also apply to a property that has been substantially renovated within the past 2 years and has also never been sold post-renovation.

A mortgage can be secured for a property that has not yet been built or is only partially complete. These are off-plan mortgages and can be more complicated to obtain a mortgage offer.

What are the pros and cons of buying a new build home?

A new home represents a degree of reliability that older properties cannot necessarily guarantee. Furthermore, you have the peace of mind that comes with knowing that they’ve been built to exacting standards, especially in terms of connectivity and energy efficiency. New homes are generally better suited to the demands of 21st-century living and tend to be lower maintenance. And, because you know that you won’t have to worry about being stuck in a chain, moving in will be faster and less stressful, even more so if you’re a first-time buyer.

That’s not to say that new-build homes don’t have their caveats. They can be more expensive than older properties and buying off-plan can make you vulnerable to construction delays or hefty reservation fees.

How do I know for sure that a property is a new build

A property needs an official NHBC Buildmark, or equivalent, to be officially classified as a new build. This serves as essentially a 10-year warranty which covers all aspects of construction. If you want to check if a property is a genuine new build, check out NHBC’s website.

Specialists in new build mortgages

At The Mortgage Store, we specialise in new build mortgages, working closely with builders and lenders alike to help our clients move into their perfect new build home. For more information on new build mortgages or assistance in finding the perfect fit for your needs, don’t hesitate to contact us. We’re here to guide you through the process.