Mortgages on new build properties
With the Government funding various incentives for buying new build properties, lots of prospective buyers are looking to these kind of properties to make their homes; especially first time buyers. Finding a mortgage for a new build property can sometimes be a little trickier than if you were buying an older property but the mortgages that are out there often require a smaller deposit due to the various Help To Buy schemes currently available.
It can be a bit confusing but you don’t have to tackle the project alone – let TaylorMade find you the best deal on your new build property.
need to know…
Whether your new build property has been built or not, developers will often ask for a reservation fee to be put in place to secure your plot. This is non-refundable so if you decide against buying the property, or your mortgage application doesn’t complete in time or falls through, you will lose this fee.
Time is often a factor when looking to buy a new build property. If your home has already been built, there’s usually a 28 day period to exchange legal contracts and to have a mortgage in place. With the usual mortgage application taking between 2-4 weeks it is essential to factor this in.
On the other hand, if you’re buying a plot that has yet to be built, you often don’t have to submit your full deposit until the property is near completion. This gives you time to continue saving for a bigger deposit which would significantly reduce your monthly repayments.
With a wealth of different incentives and schemes geared towards new build properties and first time buyers coming into effect, it can be a little overwhelming trying to figure out the best option to take.
If you’d like to get some expert advice on new build properties and the types of mortgages that would be most suitable; as well as up to the minute knowledge of all the latest government schemes available, contact one of our advisers at TaylorMade.
To ensure you get the best deal on the market, let TaylorMade give you a helping hand.
A fixed rate mortgage charges a set rate of interest for a predetermined period. Once this period is over, the interest rate usually revers to the lender’s Standard Variable Rate (SVR).
Trackers are a type of variable rate mortgage which see interest rates rising and falling based on the Bank of England’s base rate. However, unlike traditional variable rate mortgages, a tracker mortgage doesn’t have to match the Bank of England’s rate exactly. Instead, the rate the borrower is charged is likely to be a little above the base rate.
An offset mortgage links the borrower’s savings to their mortgage balance. By choosing an offset mortgage, homeowners can reduce the amount of interest charged and potentially pay off the mortgage sooner.
A cashback mortgage pays the borrower an upfront lump sum. This can enable them to pay for a costly expense such as home furnishings, a car or university tuition fees. The rate paid tends to be based on the bank's Standard Variable Rate (SVR).
A discount rate mortgage offers borrowers a reduction on the lender’s Standard Variable Rate (SVR) for a set period of time. The rate can fluctuate and so although the borrower will repay less than the SVR, their repayments could rise or fall.
A variable rate mortgage sees the interest owed rise or fall depending on the base rates set by the bank. When the base rate is low, borrowers may benefit from extremely low mortgage repayments. However, if the base rate increases, so too will the amount borrowers are expected to pay in interest.
When a homeowner has an interest only mortgage, they won’t pay traditional mortgage payments each month. Instead, they’ll only repay the interest that is due. At the end of the mortgage term, the homeowner will be expected to pay the property’s value in full.
A capped rate mortgage offers similar security to a fixed rate mortgage. The rate payable will be capped for the duration of an agreed upon period of time. During this time, the rate may rise or fall in line with market fluctuations, but it will never exceed the capped rate.
As a result, a capped rate mortgage enables borrowers to benefit from falling rates without placing strain on their budget as a result of unaffordable increases.
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If you're unsure and need some advice just give us a call, our expert team of advisers are available to help you choose the mortgage that is right for you.
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The guidance and/or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.