Incentives from a New Build Developer
There are many options when purchasing a New Build property that can help you on to the ladder. For example, a developer may offer a one of, or a combination, of any of the following:
- They will cover Stamp Duty and legal costs.
- Help with the deposit.
- Part Exchange on your existing property.
- White goods or extras for the property (Landscaping, upgraded décor, etc)
The size of these incentives is usually limited to 5% of the purchase price and all incentives need to be made clear to the Mortgage lender from the start. Any ‘financial incentives’ (Stamp Duty, Money for legal work, help with deposit) will restrict the number of lenders willing to help.
As the deposit on New Build properties often needs to be a bigger percentage than a deposit for older properties, these financial incentives may be the only way for many people to proceed.
Builder Cash Incentives
We were approached by a First Time Buyer that had secured a New Build plot for £260,000 and was now struggling to find the best mortgage. He had been offered, and accepted, a £13,000 builder cash incentive towards the deposit as part of the purchase. This increased his deposit from the 5% he had saved to 10% meaning that he could get better mortgage rates. The problem he faced was that the banks and building societies he had enquired with wouldn’t accept this type of incentive.
We looked into the best 95% LTV mortgages just in case he needed to change the builder cash incentive with another incentive and we also looked into 90% LTV mortgages that would accept the £13,000 deposit help.
Having compared the market and both scenarios, we found a competitive rate at 2.54% that allowed him to take advantage of the builder deposit incentive.
With so many options available when it comes to New Build properties and so many options when it comes to mortgages, we’d be happy to talk to see if we can help fit the pieces together. Give us a call on 01174 520 330. Our initial conversations usually last around 15 minutes.
Alternatively, you can email firstname.lastname@example.org and let us know how we can help you.
We will discuss:
- How much you can borrow
- What that will cost
- What fees can you expect
- How Lloyd Wells Mortgages work
- What insurances you will need
- What documentation you will need to provide
- Next steps
Your home may be repossessed if you do not keep up repayments on your mortgage.