If you’re considering purchasing a new build home, you may need to apply for a new build mortgage. It is a type of mortgage specifically designed for those who are purchasing a newly constructed home. In this article, we will let you know the five things you need to know about new build mortgages.
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They are Different from Traditional Mortgages:
These mortgages can be very different from traditional mortgages because they have been designed specifically for those who are buying newly constructed homes and do not have any existing property or valuations on them yet. This means that these types of mortgages have different requirements than traditional ones, such as higher deposits and stricter criteria for affordability. Also, before you can secure a new build loan, you’ll need to apply for the mortgage and provide the lender with all necessary documentation.
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You May Need a Larger Deposit:
Another thing that makes these types of loans different is the fact that they usually require larger deposits than traditional mortgages do. This means that if you have less than 20% equity in your current home then it’s unlikely that your lender will approve your application for a new build mortgage unless there is something very special about your property (such as its location).
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There May Be Incentives Available
Incentives are often offered when it comes to new builds, so if you plan on purchasing one, make sure that you ask about these incentives before signing any contracts. The incentives could include things like furniture packages or even closing costs. It’s important to note that these incentives can expire at any time so make sure that you do your research and find out what’s available before making any decisions.
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You’ll Need to Plan for Completion Dates:
When you apply for a mortgage, you will need to plan for completion dates in order to ensure that your loan has been fully paid off by that time. This can be difficult if there are delays in construction or if there are issues with your builder. In some cases, you may need to make changes to your payment schedule or adjust the amount of money that you plan on paying each month.
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You’ll Need to Work Closely with Your Lender and Builder
You’ll also need to work closely with both your lender and builder during the building process itself as well. This will help ensure that there are no delays in construction or any issues with payment schedules or anything else like that.
Conclusion:
By understanding the differences between new build mortgages and traditional mortgages, planning for completion dates, and working closely with your lender and builder, you can ensure a successful homebuying experience.