Are you considering buying a newly built property? One of the questions that may be on your mind is when you will start paying the mortgage. In this article, we will explore the process and timeline for mortgage payments on newly built homes, so you can make an informed decision.
Pre-Completion Stage
Before discussing the payment phase, it’s important to understand the stages involved in purchasing a newly built property. The process typically begins with reserving the property and involves exchanging contracts and completing the purchase.
During the pre-completion stage, which is the period before the property is finished, you will not typically make mortgage payments. This is because the property is still being constructed, and you may also be waiting for various approvals and inspections.
Completion and Handover
Once the construction of the property is complete, you will enter the completion stage. At this point, you will usually need to secure your mortgage loan and make arrangements to start making payments.
When you purchase a newly built property, it is common for the developer to arrange for a handover day. This is when you officially take possession of the property and become responsible for the mortgage payments.
Mortgage Payments Begin
After the completion and handover, your mortgage payments will typically start on the agreed-upon date specified in your mortgage contract. The exact date may vary depending on your lender and the terms of your specific mortgage agreement.
It is important to keep in mind that you should be prepared to start making payments immediately after you take possession of the property. Therefore, it is crucial to plan your finances accordingly to ensure a smooth transition.
New Build Mortgage Incentives
When purchasing a newly built property, you may be eligible for various incentives, such as help-to-buy schemes or developer incentives. These incentives can help reduce the initial burden of mortgage payments or even provide a grace period before you start paying.
For instance, some developers offer a limited period of reduced or even waived mortgage payments as an incentive to attract buyers. This can be a great opportunity to save money during the early stages of homeownership.
Frequently Asked Questions Of When Do You Start Paying Mortgage On A New Build: Essential Guidelines
When Do You Start Paying Mortgage On A New Build?
If you’re purchasing a newly built property, mortgage payments typically start once the property is complete and you’ve received the keys.
How Long After Completion Do You Pay Mortgage On A New Build?
Most mortgage lenders will give you a grace period of around one month after completion before starting your mortgage payments.
Do You Pay Rent And Mortgage On A New Build At The Same Time?
No, you won’t have to pay rent and mortgage simultaneously on a newly built property. Once you move into your new home, the rental period ends, and the mortgage payments begin.
Can I Take Out A Mortgage On A New Build Property Before It’s Complete?
Yes, it’s possible to secure a mortgage for a newly built property before it’s complete. This is known as a “pre-completion mortgage” and allows you to have financing in place ahead of time.
Conclusion
When buying a newly built property, mortgage payments typically start after the completion and handover stage. It is crucial to ensure that you are financially prepared to start making payments as soon as you take possession of the property.
Additionally, explore any potential mortgage incentives or schemes that may be available to you. These incentives can help reduce the financial burden during the initial stages of homeownership and make the process more manageable.
Ultimately, it is important to carefully review the terms of your mortgage agreement and consult with your lender for any specific details regarding when your mortgage payments will begin.
Ismail Hossain is the founder of Law Advised. He is an Divorce, Separation, marriage lawyer. Follow him.
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