The New Build Mortgage Co

We have a passion for New Build mortgages, as such, we have created The New Build Mortgage Co as a trading style of Adam’s Mortgage Group. This helps us keep all the relevant information on New Build mortgages in one place.

Whether you are looking to purchase a new build property on or off plan or if you are looking to remortgage a property which has been built in the last 10 years, we are your experts!

With our passion for New Builds, we can help source the best mortgage for you. Not only that, we can organise your purchase to ensure timescales are met, and all relevant parties are updated regularly throughout, (New Build Developers, your solicitor and the mortgage lender).

The New Build Mortgage Co

We have a passion for New Build mortgages, as such, we have created The New Build Mortgage Co as a trading style of Adam’s Mortgage Group. This helps us keep all the relevant information on New Build mortgages in one place.

Whether you are looking to purchase a new build property on or off plan or if you are looking to remortgage a property which has been built in the last 10 years, we are your experts!

With our passion for New Builds, we can help source the best mortgage for you. Not only that, we can organise your purchase to ensure timescales are met, and all relevant parties are updated regularly throughout, (New Build Developers, your solicitor and the mortgage lender).

General Information and Top Tips

The property is new, in excellent condition with guarantees.

More energy efficient than older homes.

You may be able to choose some fixtures and fittings, such as carpets, tiles and appliances.

Potential to avoid property chains.

NHBC warranty – 10-year warranty – you can check the NHBC Buildmark on NHBCs website.

Residential:

Up to 95% for New Build houses and bungalows.

Up to 95% for New Build flats and maisonette’s (please note, lenders offering these products at 95% are limited, therefore, 95% will be dependant on your circumstances).

Buy-to-Let

Up to 85% for New Build houses and bungalows

Up to 85% for New Build flats and maisonette’s.

Be mortgage ready – you may have to pay a reservation fee which is non-refundable.

Timescales matter – know when the property build should be completed so that we can ensure your Mortgage Offer does not expire before completion.

New Build mortgage offers are usually valid for 6 months, although some lenders provide a validity period of up to 12 months.

If the construction of your property is not finished before your mortgage offer expires, we can request a mortgage offer extension which usually provides another 6 months to complete your mortgage. Please note, that this may require further underwriting at the time an extension is requested.

Some builders offer incentives which can include deposit contributions or payment towards legal fees or Stamp Duty costs. These types of incentives are acceptable as long as the total value does not exceed 5% of the property value.

General Information and Top Tips

The property is new, in excellent condition with guarantees.

More energy efficient than older homes.

You may be able to choose some fixtures and fittings, such as carpets, tiles and appliances.

Potential to avoid property chains.

NHBC warranty – 10-year warranty – you can check the NHBC Buildmark on NHBCs website.

Residential:

Up to 95% for New Build houses and bungalows.

Up to 95% for New Build flats and maisonette’s (please note, lenders offering these products at 95% are limited, therefore, 95% will be dependant on your circumstances).

Buy-to-Let

Up to 85% for New Build houses and bungalows

Up to 85% for New Build flats and maisonette’s.

Be mortgage ready – you may have to pay a reservation fee which is non-refundable.

Timescales matter – know when the property build should be completed so that we can ensure your Mortgage Offer does not expire before completion.

New Build mortgage offers are usually valid for 6 months, although some lenders provide a validity period of up to 12 months.

If the construction of your property is not finished before your mortgage offer expires, we can request a mortgage offer extension which usually provides another 6 months to complete your mortgage. Please note, that this may require further underwriting at the time an extension is requested.

Some builders offer incentives which can include deposit contributions or payment towards legal fees or Stamp Duty costs. These types of incentives are acceptable as long as the total value does not exceed 5% of the property value.

The Process to Buying a New Build Home:

Step 1: Contact us to see how much you can borrow and what costs will be associated with your new mortgage.

Step 2: We will submit a Decision in Principle to confirm your eligibility before you start looking for properties.

Step 3: Start looking for your new home.

Step 4: When you have found a property, let us know the final purchase price so we can confirm the affordability before you pay the reservation fee.

Step 5: Pay your reservation fee to the developer to secure your property.

Step 6: Provide us with your reservation form and we will continue the process to apply for your mortgage. At this stage, we will request all the documents required for your mortgage application.

Step 7: Instruct a solicitor to complete the legal work. If you do not have a solicitor, we can assist you with finding one. If you already have a solicitor, we need to confirm with the lender that your solicitor is eligible to complete the legal work.

Step 8: You will receive your mortgage offer once the lender has completed the underwriting checks and property valuation.

Step 9: We will support you throughout the transaction until you receive the keys to your new home.

Speak to us for help finding the right mortgage for your new build home.

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Schemes

There are mortgage schemes available, some of which are designed specifically for new build properties. See below for an overview of these schemes and how they can help you buy a new build home.

Schemes

There are mortgage schemes available, some of which are designed specifically for new build properties. See below for an overview of these schemes and how they can help you buy a new build home.

Help to Buy Equity Loan

This is a government scheme for first-time buyers. It provides an equity loan, that you put towards the cost of buying a new build. Help to Buy aims to help first-time buyers to get on the property ladder. If you’re eligible for an equity loan, you can borrow up to 20% (40% if you’re in London) of the market value of a new build. There are price limits on homes you can buy with an equity loan. The limit is different for each region in England.

Region

East: £407,400
East Midlands: £261,900
London: £600,000
North East: £186,100
North West: £224,400

South East: £437,000
South West: £349,000
West Midlands: £255,600
Yorkshire and The Humber: £228,100

During the term of the equity loan, you only pay interest on the amount you borrowed. You do not pay off any of the loan itself. But you can choose to pay all or part of it off at any time. If you sell your home, you will need to pay off all of your equity loan. You can only apply for an equity loan if you reserve a new build from any of the homebuilders registered with the Help to Buy scheme.

For further information on Help to Buy Equity Loans, head to the Government website: Own Your Home | Help to Buy Equity Loan

For the first five 5 years:

  • The equity loan is interest free
  • You pay a £1 monthly management fee by Direct Debit

From year 6:

  • Pay the £1 monthly management fee
  • Pay monthly interest fee of 1.75% of the equity loan
  • Interest rate will rise each year in April by the Consumer Price Index (CPI), plus 2%
  • Continue to pay interest until you repay your loan in full

When you take out your equity loan, you agree to repay it in full, plus interest and management fees.

You must repay your equity loan in full:

  • At the end of the equity loan term
  • When you pay off your repayment mortgage
  • When you sell your home
  • If you do not follow the terms set out in the equity loan contract and you are asked to repay the loan in full

The amount you pay back is worked out as a percentage of the market value at the time you choose to repay.

If the market value of your home rises, so does the amount you owe on your equity loan. And if the value of your home falls, the amount you owe on your equity loan falls too.

Shared Ownership

When you buy a home through a Shared Ownership scheme, you buy a share of the property and pay rent on the rest. The share you can buy is usually between 25% and 75%, although this does vary between housing associations. Shared Ownership properties are always leasehold.

There are different rules on Shared Ownership in Scotland, Wales and Northern Ireland.

For further information on Shared Ownership, head to the Government website: Own Your Home | Shared Ownership

You can buy a home through the Shared Ownership scheme if both of the following apply:

  • Your household earns £80,000 a year or less, (£90,000 or less in London).
  • You cannot afford all of the deposit and mortgage payments for a home that meets your needs.

When you apply for Shared Ownership, you must have:

  • Accepted an offer for the sale of your current home.
  • Written confirmation of the sale agreed, (called a ‘memorandum of sale’).

You must complete the sale of your home on or before the date you complete your Shared Ownership purchase.

You can buy more of your home after you become the owner, this is known as ‘staircasing’. The cost of your new share will depend on how much your home is worth at the time you want to buy additional shares.

When staircasing, you may be required to arrange for a valuation to be carried out by a surveyor who is registered with the Royal Institute of Chartered Surveyors (RICS), your housing association will be able to confirm this.

If you own a share of your home, the landlord has the right to find a buyer for your home. The landlord also has the right to buy it first (known as ‘first option to buy’ or ‘pre-emption’).

You can sell your share yourself if the landlord does not find a buyer and they do not want to buy it themselves. If you own 100% of your home, you can sell it yourself.

First Homes

First Homes are discounted market sales which:

a) must be discounted by a minimum of 30% against the market value;

b) are sold to a person or persons meeting the First Homes eligibility criteria (see below);

c) on their first sale, will have a restriction registered on the title at HM Land Registry to ensure this discount (as a percentage of current market value) and certain other restrictions are passed on at each subsequent title transfer; and,

d) after the discount has been applied, the first sale must be at a price no higher than £250,000 (or £420,000 in Greater London).

First Homes are the government’s preferred discounted market tenure and should account for at least 25% of all affordable housing units delivered by developers through planning obligations.

For further information on First Homes, head to the Government website: Own Your Home | First Homes

  • All purchasers must be First-Time Buyers.
  • Purchasers cannot have a combined annual household income of more than £80,000 a year, (£90,000 in London).
  • Purchasers should have a mortgage to fund a minimum of 50% of the discounted purchase price.

Contact Us for Assistance with Your New Build Purchase

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