Wondering “should I buy a new build house”?
Got questions about new build properties?
Want to know the top 5 new build house FAQs?
In this article, we’ll discuss all things new build FAQs.
New Build Mortgages
When looking for a mortgage on a newly built property, it’s important to keep in mind that developers work towards strict deadlines, which means that you are normally given 28 days between putting your reservation deposit down to the point of exchange.
This is why you should start the mortgage process as soon as possible. At LTC Mortgages, we work towards those deadlines to give you the best possible chance of securing your desired new build home.
We’ve compiled a list of FAQs that we’re frequently asked by our clients.
Top 5 new build house FAQs
FAQ 1 – Is it harder to get a mortgage for a new build?
A lot of lenders do prefer a 15% deposit however there are several lenders who will accept a 5%-10% deposit.
FAQ 2 – When can you get a mortgage on a new build?
To secure a new build, you’ll need to put down a reservation fee deposit. Some developers will work to tight timescales, meaning you may only have 28 days from the point that you pay your deposit to exchange contracts. This means that you will need to apply for your mortgage ASAP.
FAQ 3 – Are mortgage rates higher for new builds?
You may be charged a higher interest rate for a mortgage on a new build. This is because lenders protect themselves in case the value of the property decreases in its early years.
FAQ 4 – How much deposit do I need for a new build?
Generally, you will be required to have a 15% deposit for a new build house however there are several lenders that do allow 5% /10% deposits.
FAQ 5 – Do new builds hold their value?
A new build property is just as good an investment as any other home. While you may pay more for a new build property initially, it has the same ability to grow in value in the same way that an older property can.
Shared Ownership
Some new build developers have the option of a shared ownership mortgage, this is when you buy a percentage of the property and pay rent on the remaining percentage to the housing association. This will allow first buyers the opportunity to get onto the property ladder, as they can choose to buy the remaining percentage throughout their mortgage term.
Deposit Unlock Scheme
The Deposit Unlock Scheme allows home-movers who have an existing mortgage, as well as first-time buyers, to access 95% mortgages on new builds with just a 5% deposit.
This new scheme provides first-time buyers a chance to purchase their potential forever home at an affordable price. It aims to make it easier for individuals to get themselves onto the property ladder.
Exclusively available on new builds, the Deposit Unlock Scheme offers a lower-risk option for mortgage lenders as it protects them from the loss they would face if a buyer wasn’t able to keep up to date with their mortgage payments. Traditional 95% loan-to-value mortgages are becoming rare so this scheme provides a solution for potential homeowners who possibly may not qualify for traditional mortgages.
This scheme can only be used if you are purchasing a property from a house builder who is registered and participating in this scheme. Your mortgage also must be submitted with a participating mortgage lender.
For more information visit: www.deposit-unlock.co.uk
Building Incentives
Some new build developers are now offering building incentives. These incentives are designed to make the purchase of a new build home more appealing and financially viable for buyers. Some developers offer incentives towards things like stamp duty and legal fees. These incentives are usually capped to a maximum of 5% of the purchase price due to lenders criteria.
Book an appointment
We hope these new build house FAQs helped. If you would like more information, book your FREE consultation today.
Get in touch and our Liverpool-based team can help you every step of the way.
Not local? Don’t worry, we also offer mortgage appointments over the phone or via Teams.
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Your property may be repossessed if you don’t keep up with your repayments on your mortgage.
