Buying A New Build Home: A Step-By-Step Guide

 

Buying a new house is equal parts exciting and tedious. As a homebuyer, there is a range of different factors you need to take into consideration before, during, and after the purchase is made.

If you are embarking on a new journey of buying your own house, here is a small home buying guide and the major steps involved in getting a new home to help you make the process smoother:

Get a mortgage in principle

If you are planning to get a mortgage for purchasing your new build property, it is important to start by getting a mortgage in principle. This is a statement from your mortgage lender about the estimated amount you are eligible to borrow from them before you finalize the purchase of a property.

While a mortgage in principle is not a legal document and does not give a 100% confirmation about the mortgage you would receive, it gives you a kick-start and lets the developer or seller of a property know that you are serious about making the purchase.

Mortgage in principle will help you with your property budget you can go up to.

Make sure you take help from a skilled mortgage broker while getting a mortgage in principle from a suitable lender.

 

Find a property that is perfect for you

After you know your mortgage arrangements now you need to find a property that best suits your needs and preferences. You must have envisioned a property before starting out your hunt. Make sure the property you choose comes closest to the one you had envisioned.

Do not settle too soon and have a look at multiple properties. Consider aspects like the size of the property, the surroundings, the amenities, the location, and the price as you find the perfect home for you.

New build property developers often lure buyers with incentives like free car parking, fittings and appliances without additional charges, the inclusion of stamp duty land tax (SDLT), and more. Be clear about such incentives being covered in the total cost of the property.

Get your property reserved

Once you have chosen your new build property and have a mortgage in principle in place, you can go ahead with making an offer to secure the  property you like.

For this, you would be required to pay a reservation fee to the developer. Depending on the property, your reservation fee can range anywhere from £500 to £2,000. Once you have paid the fee, the developer would reserve the property for a 28-day period. During this period, they would expect to exchange contracts with you and finalize the deal.

Hire a solicitor

As you move closer to making the purchase, it is important to work with a skilled and experienced conveyancer or solicitor to handle the legal matters. They would help you in drawing up relevant contracts and ensure that they do not go against you.

The conveyancing solicitor you work with would make sure that you are legally protected throughout the course of making the purchase. While many developers encourage buyers to work with their solicitors, you can always choose to work with the solicitor of your choice.

Finalize your mortgage

After you have found the right conveyancing solicitor, you can put in your mortgage application and finalize it. Now that you already have your mortgage in your application, you will have an idea about the amount you would be able to borrow.

Your mortgage lender would ask for relevant documents, check your credit score, and provide you with a final deal for the property you are willing to purchase. The lender will also carry out a valuation of the property to secure the mortgage. If lender is happy with valuation and income and affordability then you will have your mortgage offer.

As you navigate through the process of getting a mortgage for your property, make sure you work with a capable mortgage broker. A good mortgage broker would help you get the deals that best suit your circumstances and assist you throughout the process of getting your mortgage.

 Pay the deposit

Once you have your mortgage in place, you can go ahead with paying the deposit for your new property. Irrespective of the money you are putting into purchasing the property yourself, you will need to pay 10% of the property’s price as the deposit.

Ideally, you would be required to pay transfer the deposit to your conveyancing solicitor who would then transfer it to the solicitor of the developer on your behalf.

If the developer of the property enjoys protection from a warranty provider, your deposit money would be protected up to a maximum of 10% of your purchase price.

Exchange contracts through your solicitor

After paying the deposit money, you are almost done with the purchase of your new house. You will not be required to exchange relevant contracts with the help of your solicitor. As mentioned earlier, the developer or seller would require you to exchange the contracts within 28 days of reserving the property.

While exchanging contracts, your solicitor would check the following documents:

•                   The title to your new property

•                   The terms of the contract between you and the developer/seller

•                   The draft transfer or lease

•                   The planning documents for the concerned property

•                   Any other relevant documents necessary for the purchase

If needed, your conveyancing solicitor would clarify and confirm relevant information with the solicitor of the developer. Finally, once all queries are resolved, you will need to sign the contracts to authorize your purchase.

Prepare for completion

After the contracts have been exchanged, the completion could take longer some time with new build ideally 8 to 12 weeks, but it could be longer some times.

Once you have near to completion  your solicitor will complete the purchase , you can finally pack your luggage and move into your new house!