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NEW BUILD MORTGAGE ADVICE IN BIRMINGHAM

WHAT IS A NEW BUILD MORTGAGE?

A new build mortgage is a type of mortgage specifically designed for purchasing newly constructed properties. These mortgages cater to the unique aspects of buying a new build home, such as longer completion times and potential fluctuations in property value during construction. An experienced mortgage advisor in Birmingham, who understands lending criteria, can significantly boost your chances of finding the right lender on the first attempt, without negatively impacting your credit score.

Key Features of New Build Mortgages in birmingham 

  • Loan-to-Value (LTV) Ratios:
    Lenders often have stricter LTV requirements for new builds, typically offering a maximum of 85% for houses and 75% for flats. This means you may need a larger deposit compared to buying an older property.

  • Builder Incentives:
    Developers may offer incentives, such as paying for legal fees or providing upgrades. However, lenders sometimes consider these incentives when calculating the mortgage amount.

  • Extended Mortgage Offer Periods:
    Many lenders provide extended mortgage offers (e.g., 6-12 months) to account for delays in construction. This ensures your financing remains valid if the build is delayed.

  • Help to Buy Scheme (until March 2023):
    Previously, buyers of new builds could use the government-backed Help to Buy Equity Loan scheme. While this has ended, other schemes, such as Deposit Unlock, might be available for new build buyers.

  • Valuation Considerations:
    Lenders might conduct stricter valuations for new builds because their prices can initially include a "new-build premium," which might not hold when reselling the property.

  • Specialist Lenders:
    Some lenders specialise in new builds and may offer tailored products with better terms.

tips for New Build Mortgages in birmingham 

  • Research Developers: Choose reputable developers with a history of completing projects on time and to high standards.

  • Understand Terms: Be clear on how long the mortgage offer is valid and whether it accommodates potential delays.

  • Consider Timing: Early bird discounts may be appealing but understand the risks of potential changes in market conditions before completion.

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As an independent mortgage advisor in birmingham, ensuring clients understand the nuances of a new build mortgage and comparing lender options tailored to their circumstances can be crucial in securing the right deal.

How much deposit do i need for a new build mortgage?

This question reflects the specific financial considerations for new build properties, as lenders often require a higher deposit compared to older properties. For example:

  • For new build houses, lenders typically ask for at least a 15% deposit (85% LTV).

  • For new build flats, the deposit requirement is often higher, usually around 25% (75% LTV).

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