Thinking about a new-build?
Hello and welcome to the latest edition of my monthly mortgage advice column.
This month, I want to focus on the process of buying a new-build property.
You will probably have noticed various new-build estates cropping up in East Kilbride and across Lanarkshire over the last few years, ranging from the large building companies to smaller developers.
If you like the idea of buying a brand new home, fresh out of the wrapper, then a new-build home could be ideal for you.
You won’t need to compete with other buyers and end up paying over the asking price, which is a common trend right now for older properties.
You can also avoid a bidding war with other buyers and won’t have the disappointment of your best offer being declined.
The first step, as with any new purchase, is getting your ‘Decision In Principle’ for the relevant mortgage you’ll need for the property. A mortgage broker, like ourselves, can help with this.
The next step would be to make an appointment with the builder’s sales office so you can discuss what plots are available and when they are due to be completed.
At this stage, most new-builds will either be under construction or due to start shortly. The sales agent will give you a window of anticipated completion over a two- or three-month period, due to potential delays in the build.
However, this can be brought forward or moved back, it really depends on weather conditions, staffing levels and supplies, etc.
You should have the chance to visit the show home at this initial meeting, however if the site is still in its early stages, they may have other sites you can visit to get an idea of what the finished house will be like.
I would also take the opportunity at this stage to negotiate any extras to be included in your purchase as this could potentially save you a lot of money.
As the old saying goes, ‘if you don’t ask, you don’t get.’ This can be anything from deposit contribution, flooring and fencing, to integrated appliances – the sales agent will let you know what can be included.
If you’re happy with the plot and any builder incentives being offered, then you can reserve the property. Usually, this is with a reservation fee to secure the plot for you until your mortgage offer comes through.
After the reservation fee is paid, the builder will expect you to apply formally for your mortgage and supply them with your mortgage offer within a month or so.
This part is important as you should discuss with your mortgage broker when the mortgage offer is valid until, and if it coincides with the expected completion date.
Some lenders may allow an extension to the original mortgage offer if there’s a delay to the build, however some require a brand new application to be processed, so always double check this.
Your solicitor will discuss the conclusion of missives, which is when you’re legally bound to purchase the property.
It’s then a matter of counting down the days until the legal work is complete and you move in.
We are seeing more and more inquiries around buying new-builds this year due to the current climate, but as with everything, there’s only so many houses to go around, so if you’re hoping to move house this year, it’s worth looking now to see what’s out there.
I hope that’s been useful and see you all next month.
You can avoid a bidding war and won’t have the disappointment of your best offer being declined