First Time Buyer New Build Mortgage

Are there any special considerations or terms and conditions for a First Time Buyer mortgage on a new build property? What are the benefits and drawbacks of new build homes?

Builders focus on getting you to ‘conclude missives,’ which is the legal term for securing the contract. Once missives are concluded, neither you or the seller can back out without a financial penalty. Builders often want you to do that very early on.

You could potentially be securing a property that’s not going to be ready for six months or even a year, but they would like you to conclude missives within four weeks. You have to be very mindful that if you do that, your mortgage offer needs to last long enough.

If you conclude missives, your mortgage offer then expires and you have to reapply again, you could potentially be turned down. That can happen if your circumstances have changed. Managing that mortgage process is important.

Certainly in Scotland, one of the huge benefits of buying a new build property is that the price that they’re advertising it for is the price that you pay. You don’t have to get into a bidding war or the closing dates that you find sometimes on the open market, and that’s very beneficial.

How long does the mortgage application process for a new build property typically take?

It’s not specific to First Time Buyers, but you often find with new build properties that the lender will want to carry out a valuation, which can sometimes seem a bit ridiculous.They might be sending a valuer to a plot of ground, if it’s very early days. But they do that.

It can sometimes take a bit longer than assessing a home report as per the open market. Other than that, the timescale isn’t different from any other application.

It will come down to your circumstances, how complicated they are, plus the lender’s own processing times. These can vary quite dramatically from lender to lender.

How do I get a mortgage on a new build property as a First Time Buyer?

Apart from having to get that valuation, there aren’t really any more steps involved in the mortgage application process. But in terms of how long it is before you’re able to conclude and actually get the keys, that can be quite different. It varies in terms of the particular site you’re looking at, how far along they are, how popular it is, and what the property market is doing at the time.

If we’re in a very buoyant property market with lots of people interested, builders tend to sell the plots earlier in the process. You might have to be reserving very early with a very extended date of entry.

Of course, those dates of entry can be very flexible, because they’re proposing to finish building at a certain time – but weather issues or supply issues could certainly mean that changes.

What else do we need to know about First Time Buyer new build mortgages?

Without being in any way disrespectful to builders, it’s always useful to have somebody in your corner when you’re going through this. You’ll obviously have a solicitor as well, but a mortgage advisor can really help you to work out timescales and make sure you’re not disadvantaged.

We usually recommend getting somebody that you trust and have chosen, rather than just going with the builder’s advisor. It’s worth establishing an independent relationship.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.