New build mortgages

New build mortgages are specialized mortgages designed for purchasing newly constructed homes. Here are some key things to know about new build mortgages:

Types of New Build Mortgages:

  1. Help to Buy Equity Loan: A government-backed scheme that provides a 20% equity loan to help buyers purchase a new build home.
  2. Shared Ownership: A scheme that allows buyers to purchase a percentage of a new build home and pay rent on the remaining percentage.
  3. New Build Mortgages: Traditional mortgages offered by lenders for purchasing new build homes.

Benefits of New Build Mortgages:

  1. Lower Deposit Requirements: Some new build mortgages require a lower deposit, often as low as 5%.
  2. Competitive Interest Rates: New build mortgages often offer competitive interest rates and fees.
  3. No Chain: With a new build, there's no chain of buyers and sellers, making the process smoother and faster.
  4. Warranty and Insurance: New build homes usually come with a warranty and insurance, providing peace of mind for buyers.

Things to Consider:

  1. Completion Date: New build mortgages often have a completion date, which means you'll need to complete the purchase within a certain timeframe.
  2. Leasehold: Some new build homes are leasehold, which means you'll need to pay ground rent and service charges.
  3. Fees: New build mortgages may come with additional fees, such as a mortgage broker fee or a valuation fee.
  4. Resale Value: New build homes can be difficult to resell, especially if they're part of a large development.

Lenders and Products:

  1. Nationwide Building Society: Offers a range of new build mortgages with competitive rates and fees.
  2. HSBC: Provides new build mortgages with a 5% deposit requirement and a fixed rate option.
  3. Lloyds Bank: Offers new build mortgages with a 10% deposit requirement and a range of fixed and variable rates.
  4. Virgin Money: Provides new build mortgages with a 5% deposit requirement and a range of fixed and variable rates.

Tips for Applying:

  1. Check Your Credit Score: Ensure your credit score is good to increase your chances of approval.
  2. Gather Documents: Have all necessary documents ready, including proof of income, employment, and ID.
  3. Research Lenders: Compare rates and fees from different lenders to find the best deal.
  4. Seek Professional Advice: Consider consulting a mortgage broker or financial advisor to help you navigate the process.

Remember to carefully review the terms and conditions of any new build mortgage before applying, and don't hesitate to ask questions if you're unsure about any aspect of the process.