There are a number of benefits to purchasing a new-build property, including low maintenance and repairs as well as the guarantee (in most cases) that the work has been carried out to a high standard. It is also becoming easier for first-time-buyers to purchase a new property as the government implements different incentives such as the Help to Buy scheme.
Getting a mortgage for a new-build property is similar to buying any home. The application process involves an assessment of your affordability for a loan, taking into account your income and expenses. In most cases, you will need a deposit – a cash amount you can contribute to the property purchase. Then the rest will be funded by your mortgage. If you’re looking into a new-build property, it’s a good idea to speak to a mortgage advisor, who can help ensure you review a number of different mortgage options.
Timing is often crucial when it comes to buying a new-build property. For example, if properties are already built a developer might have strict deadlines for exchanging contracts and completing on a sale (the point at which you own the home). This means you need to be organised from the beginning, getting as much of your mortgage application and administration carried out as soon as possible. Your mortgage advisor will be able to advise you of the best solution and timeframes for this.
There is also a chance you will buy your new-build property ‘off plan’. This means the home isn’t built and that you will usually have seen the floor plans, specifications and artist impressions. In this instance, there may be a delay between the time you apply for a mortgage and the date your property is complete. Many mortgage offers will have an expiry date, which is often six months, after which point, the rate and amount your are offered will no longer be valid. There are instances when this can be extended to allow you more time while waiting for a property to be finished. It’s important to remember that any financial commitment such as a mortgage could change over the course of weeks or months. Your personal circumstances could be affected by your work, interest rates could move up or down and the amount a bank is willing to lend you based on your deposit can also be altered. So it’s important to consider all these factors before handing over a deposit to a developer building your property.
An expert mortgage advisor will be able to guide you when it comes to the timing of your mortgage application. To discuss the new build mortgage options available to you, click here for more information on contacting Private Wealth Mortgages.