Hello and welcome to the June edition of my monthly mortgage tips 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.
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You may prefer to buy a brand new home fresh out of the wrapper.
You also won’t need to compete with other buyers and end up paying way over the asking price, which is a very common trend right now for older properties.
New build purchases mean you can avoid a bidding war with others and don’t have the disappointment of your best offer not being high enough.
The first step, as with any new purchase, is getting your ‘Mortgage In Principle’ agreed for the relevant mortgage you’ll need for the property, a mortgage broker such as ourselves can help with this.
The next step would be to make an appointment with the builder’s sales office so you can go in and discuss what plots are available and when they are due to be completed.
At this stage, most new builds will either be under construction already 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 it’s very early stages of the site, they may have other sites available which you can go to and get an idea of what the finished house will be like and give you a feel for it.
I would also take the opportunity at this stage to negotiate any extras to be included in your purchase.
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 being included – the sales agent will let you know what can be included along with the property and potentially save you thousands of pounds in additional cost.
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 to secure the plot for you until you get your mortgage offer 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, completion of the sale and then it’s a matter of counting down the days until the legal work is complete and you move in.
We are seeing more and more enquiries around buying new builds this year due to the current climate but as with everything, there’s only so many to go around – so if you’re looking at moving this year it could be worth having a look now to see what’s out there.
I hope that’s been useful and see you all next month.
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