First Time Buyer New Build Mortgage
What's On This Page?
GET IN TOUCH
First Time Buyer New Build Mortgage
Paul Collinson explains the new build mortgage process for First Time Buyers.
What are the requirements for getting a mortgage on a new build?
They are much the same as on a used property. You’ll need an income of some sort so that we can calculate affordability with the lenders. This can be employment income, self-employment income, benefits or a combination of these.
Your credit file would also have to fit the lender’s risk appetite. Each one is different in terms of being strict or more lenient. But it’s much the same on a new build or a standard property on that front.
How much deposit do I need for a mortgage on a new build property?
The minimum for a new build house is 5%, but on new build flats, only one or two lenders will accept that. Lenders have different Loan to Value ratios for new build houses and new build flats.
The ratio is normally reduced on new build properties as a whole, but a mortgage is still achievable at 5%.
Can I use government schemes to get a mortgage on a new build?
There are certain schemes available, although Help to Buy has finished. I’m unsure if it will ever come back again. We do have the Forces Help to Buy for the military, but not the general public.
Certain councils have First Home schemes, and you would have to check with your local council on that. It’s mainly to help key workers and people on low incomes, although sometimes they do expand it to other buyers. It normally means you get a discount on a property, but you would have to pass that discount onto the next buyer.
Can I get a mortgage for a self-build property as a First Time Buyer?
Yes, you can. There are different types of mortgages for self-build, and generally the money comes out in stages. You can get a self-build mortgage as a First Time Buyer, but you do generally need a higher deposit, as well.
A lot of First Time Buyers don’t have that additional level of cash, so self-build is fairly rare. Most First Time Buyers have a 5% or 10% deposit, whereas you need between 15% and 40% with a self-build property.
What types of new build properties can I get a mortgage for?
Any houses or flats, really, as long as the construction details match what lenders are happy with. Brick walls and a tile roof is pretty much the standard, but there are other build types outside that. Most developers build using standard construction techniques, though, so most new build houses and flats would be fine for a mortgage.
Speak To an Expert
Buying a new home can be a stressful time for anyone. Our job here at Brick2Brick Mortgage Solutions is to make the process a lot easier, taking the stress out and making the clients journey smooth and so much more.
What should I consider when choosing a new build mortgage advisor?
I’d ensure that the advisor has experience in the job. Each client’s situation is different, on new builds and on standard properties. Some brokers are restricted to certain lenders, whereas we are whole-of-market brokers. That’s important in ascertaining the most suitable option for you.
Are there any special considerations or terms and conditions to be aware of with a mortgage on a new build? What are the benefits and drawbacks of new build homes?
I don’t think there are any special considerations or terms and conditions, although you do need to find out when the property is going to be built if you’re viewing off plan. They may have started building, but you don’t know when they’re going to finish – make sure you get a proper date there.
With a new build you would expect lower maintenance costs and increased energy efficiency. You also get a 10-year builder’s guarantee, and another plus point is that you can usually choose your kitchen or bathroom, etc, which you obviously can’t on a used property.
In terms of drawbacks, some people say newer properties aren’t as well built as they were in Victorian times and earlier, with properties that seem to last longer. But it’s a matter of choice and preference. Obviously, with a new build, you don’t need to do anything to it. An older property will generally need more maintenance, and you have to spend more time on repairs and DIY.
How long does the mortgage application process for a new build property typically take?
There’s not much difference. The whole process from application to mortgage offer can take one to two weeks, but then solicitors can take a while. Altogether the whole purchase process can take six weeks to three months.
Some new build developers want you to exchange within 28 days, which will feed into our research on the most suitable lenders at that time. That way, we can get a mortgage offer out as soon as possible.
We would need solicitors that are going to be quick, as well, and we have a handful of those we can contact.
There are many other factors. Some new builds aren’t completed for some time, and most mortgage offers only last for six months. So if the build was not due to complete for nine months, we would need to pick the right lender for that.
How do I get a mortgage on a new build property as a First Time Buyer?
The initial stage is to contact us here at Brick 2 Brick, and we’d find out your maximum borrowing potential, so you know what property values to look at and the deposit to save up.
Then, when you find something you like, you’d put an offer in. If they accept your offer, we carry out the rest of the fact finding – getting your employer details, #property details and finding the most suitable mortgage option for you. Then we’ll apply with the documents that you’ve sent to us on file.
We keep you updated so you know exactly what is going on through the whole process. After the lender has valued the property and they’re happy with the case, it will go to mortgage offer. After that, the solicitors take over and we can help move things along, especially if you use one of our recommended ones.
How can a mortgage broker help a First Time Buyer with a mortgage on a new build?
We’ve spoken about the steps we take to support you. After the application and mortgage offer, if there are any issues on the legal side we can help to push that through. We can go higher up within the firms. We deal with a group that can also step in if needed.
Basically, our work won’t stop at the mortgage offer. We will be there with you every step of the way until the day you move into your new home.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
