New Builds: Mortgage Broker Guide to Your New Build Mortgage

New Build Homes and Mortgages in the UK: Why They’re the Ideal Choice for Homebuyers

New builds are attractive for many buyers – they’re energy-efficient, chain-free, and come with builder guarantees. But when it comes to securing a new build mortgage, there are crucial differences you need to know. As a specialist mortgage broker, Montgomery Financial offers a trusted guide to new build mortgages, tailored to your circumstances.

No Chain, No Stress

New build homes remove the hassle of upward chains. That said, getting a mortgage on a new build often comes with tighter lender criteria. Our expert mortgage advisers understand these challenges and ensure you get a mortgage offer that works.

Lower Monthly Costs, Higher Efficiency

A modern new build home means better insulation, eco-friendly features, and ultimately lower bills. Add a competitive mortgage deal into the mix, and you’re in a great position to save more each month. Many lenders reward energy performance with lower interest rates, helping you manage your mortgage balance more efficiently.

No Renovations or DIY Required

There’s no need to spend on repairs or updates. Everything is brand new. With our help, you can focus on enjoying your property, not worrying about the mortgage work or paperwork. Our mortgage experts will take care of the complex bits.

The Buying Process Accordion

Step 1: Work out your deposit and how much you can borrow

Understanding your affordability is the first crucial step in the home-buying process. Most lenders will ask for a deposit between 5-10% of the purchase price, though some innovative products now offer 100% mortgages and 1% deposit mortgages for eligible first time buyers.

Your deposit directly affects the mortgage rates available to you. Generally, the larger your deposit, the better mortgage rates you'll be able to secure. However, don't let a small deposit discourage you - there are many options available for first time buyers, including government schemes designed specifically to help you get onto the property ladder.

When calculating how much you can borrow, lenders typically offer 4-4.5 times your annual income, though this can vary based on your financial situation and the lender's criteria. Our mortgage advisors will help you understand exactly how much you'll be able to afford, taking into account all your income and expenditure.

Step 2: Get a mortgage in principle (MIP)

A mortgage in principle, also known as an agreement in principle or decision in principle, is a conditional offer from a lender stating how much they're willing to lend you. This crucial document demonstrates to estate agents and sellers that you're a serious buyer with access to mortgage funding.

Our mortgage advisors can arrange your mortgage in principle quickly and efficiently, often within 24 hours. Having this in place before you start house hunting puts you in a stronger position when making offers and shows sellers you're ready to proceed with your purchase.

Step 3: Get house hunting

Once you know how much you can borrow and have your mortgage in principle, you can start searching for your perfect first home. Take your time during this process - finding the right property is crucial, and you don't want to rush into a decision you might regret.

Remember that your mortgage in principle typically lasts 60-90 days, so factor this timeframe into your property search. If needed, we can arrange a new agreement in principle to extend your searching period.

Step 4: Current First-Time Buyer Mortgage Rates and Market Trends

The mortgage market offers various products designed specifically for first time buyers, with competitive mortgage rates available across different deposit levels. Understanding the different types available helps ensure you select the best mortgage for your circumstances:

Fixed-rate mortgages offer stability with guaranteed repayments for a set period, typically 2-10 years. This predictability makes budgeting easier and protects you from interest rate rises during the fixed period.

Variable-rate mortgages fluctuate with market conditions and the lender's standard variable rate. While these can offer savings when rates fall, they also carry the risk of increased payments if rates rise.

Our mortgage advisors will explain all available options and help you choose the mortgage product that best suits your financial situation and long-term plans.

Step 5: Find a conveyancing solicitor

Conveyancing is the legal process of transferring property ownership. Choosing an experienced solicitor is essential for a smooth transaction. Our mortgage advisors can recommend trusted conveyancing professionals who specialise in first-time buyer transactions.

Your solicitor will handle all legal aspects of your purchase, including property searches, contract reviews, and the final exchange of contracts. They'll work closely with our team to ensure all mortgage requirements are met throughout the conveyancing process.

Step 6: Apply for a mortgage

Once you've chosen your mortgage product and found your ideal property, we'll submit your formal mortgage application to your chosen lender. This process requires detailed financial documentation, including bank statements, payslips, and proof of deposit.

Our mortgage advisors handle the entire application process, liaising with lenders on your behalf and keeping you updated every step of the way. We'll ensure your application is submitted accurately and promptly to avoid delays.

Step 7: Valuations and Surveys

Your chosen lender will arrange a valuation to confirm the property's worth matches the loan amount. This protects both you and the lender by ensuring the property provides adequate security for the mortgage.

We recommend considering additional surveys beyond the basic lender valuation. A homebuyer's survey or building survey can identify potential issues that might affect the property's value or require future repair costs.

Step 8: Get your mortgage offer

Receiving your formal mortgage offer is a significant milestone in your first home purchase. This legally binding document confirms your lender's commitment to provide the agreed mortgage amount, subject to the conditions specified.

Your mortgage offer typically remains valid for 3-6 months, providing sufficient time to complete your purchase. Our mortgage advisors will review the offer carefully with you, ensuring you understand all terms and conditions before proceeding.

Step 9: Exchange Contracts

Contract exchange is when your purchase becomes legally binding. Both you and the seller commit to completing the transaction, and a completion date is agreed. At this point, you'll typically pay a deposit (usually 10% of the purchase price) to the seller's solicitor.

Step 10: Completion & moving into your first home

Completion day is when you finally get your keys and become a homeowner! The remaining mortgage funds are transferred to the seller, final legal formalities are completed, and ownership officially transfers to you.

Our support doesn't end at completion. We'll contact you before your mortgage deal expires to ensure you continue getting the best rates available through remortgaging.

Applying for a First Mortgage or Moving Home – Let's Get You Moving

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Whether you're buying your first home, or looking to move home, thinking about your first mortgage, or just exploring options, we’ll make the entire process a lot easier.

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New Build Mortgage FAQ

What is a new build mortgage?

A new build mortgage is a type of mortgage designed specifically for buying new build properties. These often come with stricter LTV rules and shorter mortgage offer validity. Montgomery Financial's mortgage brokers know how to navigate this.

How much deposit do I need for a new build home?

Most lenders ask for at least 10%, though schemes like the Deposit Unlock scheme or Mortgage Guarantee Scheme can reduce this to 5%.

Is getting a mortgage for a new build harder?

It can be. Some mortgage lenders limit borrowing or require a larger deposit. Our brokers help you overcome these barriers with tailored mortgage advice.

How long does the new build mortgage application process take?

Anywhere from 2 to 6 weeks, depending on lender response times, your documents, and whether the new build project is completed or still in development.

Can I get a mortgage on a new build with bad credit?

Yes, but only if you use an experienced mortgage broker. We work with lenders who offer specialist mortgage options for bad credit clients.

Are there any incentives for buying new builds?

Yes. Developers often include incentives such as deposit contributions or free upgrades. You may also qualify for shared ownership mortgages or the Deposit Unlock scheme.

What are the pros and cons of new build mortgages?

Pros include incentives and schemes available, energy efficiency with lower bills, and longer mortgage offer windows. Cons include fewer lenders, potential valuation issues, and stricter lending criteria.

Can I remortgage my new build property?

Yes. But some lenders treat new build homes differently. Montgomery Financial helps you secure a competitive mortgage when you're ready to switch deals.

What mortgage options are available for new builds?

From repayment mortgage plans to interest-only mortgages, buy-to-let mortgages, and residential mortgages, we help you compare mortgage options and pick the best for your situation.

Can I get a new build mortgage as a first-time buyer?

Absolutely. Many first-time buyer clients come to us for mortgages for new builds. We help you get a mortgage approved fast and access first time buyer mortgages designed for new build purchases.

Can I buy a new build home using shared ownership?

Yes, many new build homes are available via shared ownership. We help you understand how much of a share of a new build you can purchase and what your monthly payments will look like.

ADVICE HUB

Our comprehensive advice hub provides detailed guidance on all aspects of first-time buyer mortgages. From understanding mortgage terminology to navigating government schemes, our resources help you make informed decisions throughout your home-buying journey.

Regular updates ensure our advice reflects current market conditions and regulatory changes affecting first time buyers. Whether you're just starting to consider homeownership or are ready to make an offer, our advice hub supports you every step of the way.

All people working within Montgomery Financial share those values and beliefs and support the reinforcement of the fair treatment of our customers.

The information contained in this website is subject to UK regulatory regime and is therefore intended for consumers based in the UK

There may be a fee for mortgage advice, the exact amount will be based on your circumstances and will be confirmed upon initial consultation. A typical fee of £476 is payable on application for residential mortgages and £673 for buy to let mortgages.

Montgomery Financial is a trading style of Montgomery FS Ltd, which is an appointed representative of The Right Mortgage Limited, which is authorised and regulated by the Financial Conduct Authority. Montgomery FS Ltd is registered in England and Wales no: 12305679. Registered Address: The Granary 8 Strixton Manor Business Centre, Strixton, Wellingborough, NN29 7PA

Your home may be repossessed if you do not keep up repayments on your mortgage.

New Build Mortgages for New Builds in the UK – Expert Broker Advice