In theory, the 'long-stop' date is designed to protect you from losing your mortgage offer, as depending on the lender they often expire after six months. This is where having a great conveyancer is vital, as they should keep both you and your mortgage lender up to date throughout the process. Before you move in, make sure you have a snagging survey conducted so that any issues with the property can be identified and fixed as quickly as possible. Getting a mortgage for a new-build home can sometimes be harder than for an older property, as some lenders put stricter limits on the maximum value of a property on which they'll offer a loan.
Timing can also be an issue. Mortgage offers tend to be valid for six months, which can cause a problem if you're buying a home that hasn't been built yet see buying off-plan and the projected completion date is further in the future. Some lenders will consider extending their offers, but this is often subject to reassessing your application. A few lenders make mortgage offers for new-build homes that last for longer periods, but these are by no means the norm.
An impartial mortgage broker should be able to advise on the best lender and deal for your situation. In England, , new homes have been bought so far using the government's Help to Buy equity loan and London Help to Buy schemes, which apply exclusively to new-build homes.
Alternatively, if you can't afford to buy a house outright it might be worth looking into shared ownership , which allows you to buy part of a home and pay rent on the rest. Some house builders run part-exchange PX schemes, which allow buyers to purchase a new-build home and use their current property as part payment. While part-exchange schemes remove the hassle of selling your home the traditional way, there are disadvantages. Some developers will offer below the market value, so you should always have your own valuations done by local estate agents before agreeing to anything.
If you're buying a flat, it's normal for it to be sold on a leasehold basis - meaning that you own the dwelling but not the land it stands on, and only for a limited number of years before it passes back to the freeholder landowner. Owning a leasehold property will normally involve paying a ground rent to your freeholder. If you're in a flat, you'll also pay a service charge for the cost of maintaining the common parts of the building and grounds.
In recent years, a large number of new-build houses were also sold as leaseholds. However, the government announced in June that it would ban new-build houses being sold as leasehold. If you're buying a new-build leasehold property, it's important to check that your lease doesn't include a ground-rent-doubling clause, which involves the ground rent doubling every decade.
The presence of this clause has led many new-build homeowners to become stuck in unsellable properties, as increasing numbers of mortgage lenders are refusing to lend on homes with this in their leases. In June , Which? As you can see, there's a lot to think about before buying a new-build. We've summarised the most important things to bear in mind in the table below. Find out more: viewing a show home.
Financial Services Limited. Financial Services Limited is a wholly-owned subsidiary of Which? Limited and part of the Which? Money Compare is a trading name of Which? Money Compare content is hosted by Which? Limited on behalf of Which? Mortgage calculators. Compare Mortgages. In this article. Why buy a new-build property? What's included in a new-build property? Are new-build prices negotiable? Is there a new-build premium?
The process of buying a new-build New-build mortgages What schemes can help me buy a new-build? Can I part-exchange to buy a new-build? Are new-builds freehold or leasehold? Pros and cons of buying a new-build. Coronavirus COVID home-buying update Different parts of the UK have been placed under varying restrictions in recent months, and in some cases this has affected the property market.
Visit the following articles to find out more: Can you move home during the coronavirus lockdown? How has the coronavirus affected house prices? How to apply for a mortgage payment holiday For the latest updates and advice, visit the Which?
Advantages of buying a new-build Disadvantages of buying a new-build Guarantees: new-build homes come with a year NHBC warranty covering structural defects. Most developers also provide their own two-year warranty. Delays: properties aren't always completed on time.
If there's a hold-up during construction, your mortgage offer could expire. These signed contracts are then exchanged. At exchange of contracts both you and the seller are legally bound by the contract and the sale of the house has to go ahead.
If you drop out, you are likely to lose your deposit. You should make arrangements for the supply of gas, electricity and telephone service and make sure that the seller is arranging for final meter readings to be made.
Completion of the purchase usually takes place about four weeks after exchange of contracts, although it can be earlier.
On the day agreed for completion The solicitor or licensed conveyancer in England and Wales only will usually send their account to you on, or soon after, the completion date. If you are thinking about buying a property at auction, it's best to do some research beforehand.
There is a helpful guide on buying a property at auction on the RICS website at www. There are several schemes in England aimed at helping people who otherwise would not be able to afford to buy a home. You can find out more about other home buying schemes on GOV.
Social HomeBuy is a scheme to help local authority and housing association tenants buy a share in their home. To qualify for Social HomeBuy you must have been a local authority or housing association tenant for at least two years or five years if you first became tenant of a social housing landlord on or after 18 January You may also be able to reduce your share or go back to renting as a tenant.
If you are interested in Social HomeBuy, you should contact your landlord to find out if they are taking part in the scheme and whether or not you are eligible.
It is up to each local authority and housing association to decide whether or not it will take part in the scheme. Home Ownership for People with Long Term Disabilities HOLD can help you to buy any home that is for sale on a shared ownership basis if you have a long-term disability.
A list of agents is available on the Help to Buy website. Help to Buy: equity loan is a shared equity scheme for first time buyers and existing homeowners who want to move. The equity loan is interest free for the first five years. From year six a fee of 1. The loan can be repaid at any time or when the property is sold.
Further information about the scheme is available from the Help to Buy website. Homeswithinreach is a home ownership scheme that provides help to eligible first-time buyers trying to get onto the housing ladder. It is intended to provide help to those people who otherwise would be unable to buy adequate housing to meet their needs on the open market. HomeBuy Ownership is available to local authority and housing association tenants, and to some other people in housing need.
Help is limited to people who would not be able to buy a home without help from the scheme. You will need to repay the loan when the property is sold. If the property has increased in value, this will mean that the amount that you repay will be larger than the amount that you initially borrowed.
For more information about HomeBuy, go to the Homeswithinreach website at www. This scheme provides help to eligible first time buyers on middle incomes who cannot afford to purchase a suitable home without help. You must be able to meet the long-term financial commitment of home ownership. The properties are for sale on a shared equity basis. Homeswithinreach will lend you the remaining share of the property price. You will be able to buy further shares from Homeswithinreach if you want to.
You don't have to pay rent on the share owned by Homeswithinreach. When the property is sold, Homeswithinreach will get a proportion of the sale price.
This will depend on the size of the share they have in the property. For more details of the scheme, visit the Homeswithinreach website at www. Rent First aims to help people who cannot afford to pay full market rents. It can also help people who may want to buy in the future.
Some schemes also aim to help people who are presently renting from a social housing landlord and who may wish to become owner occupiers in the future. The rent in a Rent First scheme will be higher than in an ordinary social housing tenancy. In some schemes, if the property increases in value after the tenancy began, when the tenants purchase the property, they will be allowed to have half the increase in value to help them to fund a deposit for the purchase.
Help to Buy - Wales is a shared equity scheme. The government loan is interest free for the first five years. More Information is available on the scheme's website at www. LIFT offers a number of shared equity schemes operated by housing associations in Scotland. If you want to sell the property, the housing association will get its share back. The Help to Buy shared equity scheme is available to first-time buyers and existing home owners who want to buy a new build home.
There is a budget for each financial year, and once it has been fully allocated no new applications are considered for that year. A mortgage lender is likely to expect you to contribute a minimum five per cent deposit.
The Scottish Government will provide an equity loan of up to twenty per cent of the value of a new build property. This means that you will have to secure up to a seventy five per cent mortgage. The mortgage must be a repayment mortgage. The scheme applies to homes up to a given maximum value. If you want to find out if you are eligible for assistance under the scheme, you must contact a participating home builder who will refer you to an independent financial adviser and an agent who administers the scheme.
There is more information about the scheme including whether applications are being accepted for the current financial year, and the current maximum value for a property under the scheme on the Scottish Government website at www.
There is also a leaflet for buyers and a list of participating home builders. You will probably have the right to buy if you are a secure tenant of a social housing landlord, including:. In November , the Government extended right to buy to housing associations in a pilot scheme with 5 housing associations. The tenants of those associations can start the process but can't complete the purchase until the right to buy for housing associations is enforced by statute which is currently unknown.
To qualify, you must also have been a secure tenant of a social housing landlord for at least 3 years. Some assured tenants have what is called the 'preserved right to buy'. You may have the preserved right to buy if the local authority sold your home to another landlord while you were renting it - for example, to a housing association. Your landlord can tell you if you have the preserved right to buy. If you are not sure whether you have the right to buy, you should check with your landlord which category you fit into.
If you are a secure tenant of a local authority, you should be given written information to help you decide about the right to buy. You can find out about the right to buy in England on GOV. In England, the government has also set up a call centre and a website to help you work out if you are eligible and to decide if buying your home is the right option for you.
The call centre can be contacted on and you can get help of the Right to Buy website. The discount will not exceed national upper limits. If you exercise the right to buy and then sell the property within a certain period, you may have to repay some or all of the discount — check the rules with your local authority.
As a tenant who wants to exercise your right to buy, you should try to obtain a mortgage from a building society or high street bank. You could also contact a mortgage broker to see if they can arrange a mortgage.
However, if you cannot afford to buy the property outright you can still buy under the rent to mortgage scheme. Under this scheme you can buy a share of the property and make mortgage repayments on the amount you have borrowed for this.
The landlord will retain ownership of the remaining share of the property. If you want to apply for the right to buy, you should ask your landlord for the Right to Buy application form form RTB1.
The right to acquire only applies to a limited number of properties - for example, homes built with public funds on or after 1 April Contact your landlord if you want to find out about the right to acquire your home.
You can also find out about applying for the right to acquire on GOV. Shared ownership schemes are intended to help people who cannot afford to buy a suitable home in any other way.
You usually share ownership of the property with a local authority or housing association. You pay rent to the landlord for part of the property and a mortgage on the rest. You will usually be able to buy further shares in the property at a later date. To qualify for the scheme you must usually be a first time buyer, and priority is given to local authority or housing association tenants.
Other people in housing need may also be considered for the scheme. You must be able to get your own mortgage to meet the purchase costs on a percentage of the property.
More information is available on their website at www. In England, more information on shared ownership accommodation is available from the Help to Buy website at www. In Wales, more information is available form the Community Housing Cymru website at www. If you wish to buy a home you may be able to borrow money to do this. This is called a mortgage.
The loan is for a fixed period, called a term and you have to pay interest on the loan. If you do not keep up the agreed repayments, the lender can take possession of the property. This is a mortgage in which the capital borrowed is repaid gradually over the period of the loan.
The capital is paid in monthly instalments together with an amount of interest. The amount of capital which is repaid gradually increases over the years while the amount of interest goes down. With this type of mortgage, you pay interest on the loan in monthly instalments to the lender.
Instead of repaying the loan each month, you pay into a long-term investment or savings plan which should grow enough to clear the loan at the end of the mortgage term. However, if it doesn't grow as planned, you will have a shortfall and you will need to think about ways of making this up. You can find further information about interest-only mortgages, repayment plans and shortfalls on the Money Advice Service website at www. We have provided this link for your convenience but do not endorse or guarantee the links, privacy, or security policies of this website.
Continue to 3 rd party Stay on Fulton Bank. Sell first, then buy If you're like most homeowners, you need to get the equity out of your current home to help make a down payment on your next home, and you don't want to pay for two mortgages as you wait for your current home to sell.
There are a few options to consider, such as: Closing date negotiation —Finding a buyer for your current home is good news. But if the buyer has requested closing or occupancy on a date that won't allow you time to purchase your new home, try to negotiate for a later date. If you already have a contract to purchase another home, you may be able to negotiate both closings to occur on the same day if your buyer is flexible.
Rent-back agreement —If your existing home sells quickly before you've had a chance to close on a new home, you may be able to negotiate with the buyer to allow you to remain in the home for a specified amount of time no more than two or three months in most cases.
In return for allowing you to stay in the home longer, you can pay rent to the buyers or possibly negotiate a lower selling price. Stay with family or friends— Sometimes, the buyer of your current home may need to move in immediately or may not be willing to allow you to stay. In that case, you may need to ask friends or family members if you can stay with them until you're able to find or complete the purchase of a new home.
In hot real estate markets with low inventory, finding a friend or family member who will allow you to live at their house temporarily will save you a lot of headaches. Pay for temporary housing —When there are no other options, you may have to rent at an apartment, condo, extended-stay hotel or short-term vacation home between closing on your former home and closing on your new home. In that case, the costs can accumulate quickly.
In competitive markets, it may be difficult to find accommodations that will be available during the needed dates. Be prepared to be flexible, such as moving between two or more locations during your in-between time. Remember, the hassle will be worth it when you're able to complete the sale of one home before closing on your new home. Keep in mind that what can start out as a temporary solution can easily turn into a long-term problem.
Choose wisely, and give yourself a time buffer for transitions between housing. Buy first, then sell Sometimes, you must find a new house quickly to relocate for a new job, or you may just find your dream home and want to make an offer before it gets away. Here are some common options: Contract contingency —If you want to make an offer on a new house, but you don't want to purchase it until your existing home has sold, you can request that the new house purchase be dependent — also known as contingent — on the sale of your home.
In a competitive real estate market, where there are plenty of other motivated buyers, a seller may not accept such a contingency.
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