New build mortgage
Your guide to new build mortgages
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If you are buying a newly built or significantly renovated property, which has not been sold within the past two years, you will need a new build mortgage. There are many benefits to buying a brand-new property, but securing a mortgage without professional help, can be tricky for a variety of reasons which we will cover in this guide.
Read MoreNew build mortgage interest rates: As the value of the property may decrease over time, new build mortgages are generally perceived by mortgage lenders to be risky. Because of this, you will generally need to pay a higher rate of interest.
New build mortgage deposit: As newly built properties pose a risk to mortgage lenders, the maximum loan to value (LTV) they set for new build mortgages is usually low, which means you may need to save a bigger deposit.
New build mortgage offers: As most mortgage offers are only valid for 6 months, you could have to re-apply for your mortgage, if you are unable to move into your new home, before the mortgage offer expires. If your financial situation has however changed since you first applied for your mortgage, you may not be able to obtain a new mortgage with the same lender.
New build house prices: If the market value of your home changes whilst it is being built, you will still have to pay the agreed purchase price, which could have a positive or negative affect on your mortgage. If the value has increased, you will own more of the equity in your home. But if it has decreased, your lender could lower their original offer or completely withdraw it.
If you are struggling to save a large enough deposit to buy your first home, you could borrow up to 20% (40% if you are buying a home in London) of the cost of a new home from the government through its help to buy equity loan scheme. The loan can only be used by first time buyers and existing homeowners to purchase a newly built property up to the value of £600,000. But you do not pay any interest on the loan for the first five years and will only need a 75% mortgage and 5% deposit to purchase your new home.
As a mortgage on a new build house is often more problematic than a mortgage for an older property, seeking advice from an independent mortgage broker could be beneficial. At Fosters Financial, we have excellent relationships with all the UK’s leading and specialist mortgage lenders and can therefore help you to find the perfect deal for your needs.
We know how complicated the new home process can be, so once we have found you the best possible mortgage, we will also handle your entire application to ensure it is a complete success. To book your free, no obligation consultation with one of our friendly new build mortgage advisors, simply get in touch or request a callback later here today!
Subject to status and lending criteria
If your applying on your own, leave the Applicant 2’s income blank
Exact borrowing amount will depend on your circumstances including but not limited to income, income source, dependents, age, credit history and commitments
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Your home may be repossessed if you do not keep up repayments on your mortgage. There will be a fee payable for mortgage advice. This will typically be £399 but for more complex cases where there is significantly more work or expertise involved, we charge a fixed fee of £995. One of our advisers will detail fully how much we charge and when it is payable, before we proceed with an application on your behalf. Mortgage calculator based on a maximum of 5 times income. As with all insurance policies, conditions and exclusions will apply.
Fosters Financial LTD is an Appointed Representative of JLM Mortgage Services Ltd, which is authorised and regulated by the Financial Conduct Authority. Registration numbers 743945 and 300629. Further details may be found by visiting www.fca.org.uk. Registered Office: 17 De Grey Square, Colchester, CO4 5YQ Registered Company Number: 09290950 Registered in England & Wales
