Are you thinking about buying a new build house this year but aren’t sure of where to start?
With new build properties, the buying process is slightly different, so we’ve laid out the seven stages you need to follow to help everything run as smoothly as possible.
1. Speak to a mortgage broker
By speaking to a mortgage broker you can lay all your cards on the table and see what your options are. A mortgage adviser will look at your current finances and help you work out your affordability against the cost of borrowing, whilst also taking into account any ongoing costs, such as household bills, insurances etc. Your adviser can also talk through any schemes you might be eligible for, such as Help to Buy.
4. Reservation fee
Your builder will need to take payment for the reservation fee. This reserves the plot for your new home. Once this has been paid, it’s time to speak with your mortgage adviser again so they can help find the right mortgage deal for you.
6. Find a solicitor
When purchasing any house you need a solicitor to take care of the legalities involved with buying a property. This includes carrying out environmental searches, signing and exchanging the contracts, as well as seeing the whole process through to completion.
2. Start the search
Now you have a good idea of how much money you can afford to borrow, you can go forth and start house-hunting! Deciding where to live can take time and obviously, you’ll be bound slightly by where the new build development sites are, but it’s important to consider all your options in terms of location.
5. Applying for your mortgage
The main difference between applying for a mortgage on a new build property, compared to an older property, is the time constraints you’re up against. From the day you pay the reservation fee to the builder, you have 28 days to get your mortgage application sorted out, so it’s important to get your paperwork ready i.e. payslips and bank statements, so there aren’t any hold ups when the time comes.
7. Mortgage offer
Once your mortgage application has been approved, you’re ready to exchange contracts and set a completion date to move into your new home. This will often be dictated to by the builders, and you’ll no doubt be able to move in as quickly as they can build it.
If you’re still weighing up whether new build is the right home for you, then you might want to take a look at our article ‘Why buy a new build house?’
3. You’ve found ‘the one’
Congratulations, you’ve found the house for you. Now it’s time to get your offer accepted and get it in the bag! Consider carefully the price the builder is selling it for and what you’re willing to pay for it. If you think it is worth the asking price and it ticks all your boxes, there’s no point in hanging around incase someone else gets in there before you. However, you’re within your rights to try and negotiate on a price, although this can be quite daunting if it’s your first time.
Important information
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.