NEW BUILD MORTGAGES
New Build Mortgages for First Time Buyers
There are a lot of advantages when buying a new build as a first time buyer. The excitement of purchasing a brand new property, with everything completely fresh and a blank canvas to make your own beautiful home or being able to access advantage different first time buyer mortgage schemes offering a fantastic range of schemes, specifically targeted for helping first time buyers onto the property ladder. Here you will find all the new build first time buyer mortgage options and government-enabled mortgage schemes available to you when considering a new build property.
New Build Mortgage Broker
Mortgage Chain help first time buyers purchase new build properties and are a specialist new build mortgage broker. New build mortgages work differently from normal traditional mortgages and mortgage lenders have different sets of criteria that they would apply to new build mortgages.
There are several advantages when buying a new build. You’re moving into a property that will require minimal maintenance and is covered by a building warranty for up to 10 – 15 years.
New build options are improving all of the time as well as the options to purchase them. Government initiatives are guaranteeing that new homes are being focused on over the next 5-10 years, with targets of 300,000.00 new build homes being built per year; Our mortgage advisors are experts in the area of new build mortgages, so please do get in touch for any enquiries you may have: Contact
New Build Mortgages 90% LTV
It is now possible to obtain 90% new mortgages 90% ltv. However, this is where you need to be careful. Most mortgage lenders will only lend up to 85% loan to value and this also could differ (the loan to value) whether you are buying an apartment or a house. It is also the same with new build mortgages 90% ltv. These 90% mortgages are only available if you are buying a house and there is only a very small pool of lenders that will provide this type of mortgage. Thankfully mortgage chain know who these are and have maintained excellent relationships with these lenders over the years.
How do new build mortgages work ?
When you are looking to purchase a new build property, who may wonder, how do new build mortgages work ? You may go to a new build development in the very early stages of the build. This will be classed as “phase 1” on the development when the first properties are being made. A new build development will usually be broken down into steps, known as “phases”. If your level of interest in buying a new build home starts in “Phase 1”, it is very likely that the properties you will be looking at, could be shells, at the very early stages of the build. However if you sign up in these early stages of the build, such as “phase 1”, it is possible you can select some elements, such as flooring and tiles, kitchen units, bathroom fittings, carpets and add ons to match your own personal preference as well as benefiting from developer incentives such as contributions towards your deposit, paying some or all of your Stamp Duty or providing extra add ons, usually required as a paid extra.
In addition, new build properties can benefit from the latest insulation and energy efficiency techniques, such as underfloor heating, solar panel heating, and fantastic insulation. You will normally find a new build property as an energy rating efficiency, which is measured by an EPC (energy performance certificate) of an “A” or “B” rating. As “A” rating would be required to have solar panels, so if you are wondering why it is a “B” rating, that is why. Solar panels are not everyone’s cup of tea. Even without them, you are going to be saving money on your heating and utility bills.
Buying a new build “off plan”
The developers or selling estate agent should be able to provide you with plans, which give an idea, usually via computer-generated images of what the property will look like at completion, once the build is finished. If you buy a property before it is completed, this is classed as buying “off-plan”, as you cannot see the property. Because of this, you may be able to receive extra discounts or incentives, compared to buying the property near or at completion.
Sometimes the information provided can be limited and the generated images may not be 100% accurate. Our advice would be to wait until the first property is near completion, so you can get a more accurate feel of the over finish and design. However, the possible problem of waiting for a new build site to develop before any decisions are made, is that they do tend to be sold very quickly! So quick decisions sometimes need to be made, it is good to have someone with experience helping you make these tough decisions. If you are happy to wait, always watch out for properties coming back onto the market, as not every purchase will go through. This is often typical towards the end of the build as well when it is most common for new build properties to re-appear, as they have “fallen out” at the last minute.
New Build Schemes
The Government is offering a number of new build mortgage schemes to attract interest from first time buyers and home movers, including specific schemes tailored for first time buyers. This is designed to help first time buyers making the step onto the ladder, such as mortgages with just a 5% deposit. Government guarantees encourage mortgage lenders to offer a large range of mortgage products to buyers with small deposits and low mortgage rates.
Help to Buy: Equity Loan
With a new build help to buy mortgage, you can purchase a new build home up to the value of £600,000, with only a 5% deposit. The government will provide a further sum, known as an “equity loan” up to a maximum of 20% (outside of London) or 40% (within London) of the property value. The benefit means you can choose a mortgage lender who provides rates, with a much larger deposit, resulting in better mortgage rates and a larger pool of lenders to choose from.
According to 2018 figures from the Ministry of Housing, Communities and Local Government, 158,883 properties have been purchased using the Help to Buy equity loan scheme.
The scheme opened on April 1 2013 and has been extended up to 2023. the scheme is for first time buyers and has regional price caps, as highlighted here by the governments help to buy regional price caps.
New Build Shared Ownership
When buying a new build home, shared ownership mortgages are available for buyers who are looking to buy a share of a new build, starting at an equity share of 25%. This provides a big advantage to first time buyers with lower deposits and lower incomes, as usually shared ownership properties usually work out cheaper on a monthly basis, when compared to properties of the same value.
When buying a shared ownership new build, you will purchase a share, and rent the remainder from the housing association. The biggest advantage is that you only need to deposit 5% of the share you are buying. That’s is 75% less, than if you were buying the property outright. You can then purchase larger shares later on down the line. This process is known as “stair casing”.