Published 9 February 2016 · Last reviewed 25 February 2017 · Older article — see current rates
An off plan new build mortgage is all about timing.
The developer will exert pressure for a deposit / reservation fee so its vital you get your off plan new build mortgage sorted. Once they have paid this over you are effectively committed or put another way ‘trapped’ so you need to be confident you have the new build mortgage on the way unless you are a cash buyer.
The availability of off plan new build mortgage vary from lender to lender. Most will require a greater deposit than on a conventional purchase, normally 15% for houses and 25% for flats but at Niche we have access to funding for lower amounts.
The off plan new build mortgage providers operate different rules. All will insist that the mortgage completes within a certain time line. This may be measured from Application Date or Mortgage Offer so if you do not expect the property to be build for months its worth checking with your Mortgage Professional, such as Niche Advice, to make sure your one is flexible and has suitable length and extension options in case the build does not go to plan.
In their assessment the off plan new build mortgage Lender will look at the credentials of the developer and guarantees on the build such as NHBC certificates.
In terms of valuation most will carry out a visit to the site to look at similar completed properties on the development and then a second visit when the property you are buying is fully built. Depending on your lender this may or may add to the set up cost.