New Homes Frequently Asked Questions

What Is Part Exchange?


Part Exchange allows people to trade in their current home as part payment for a new home. Put simply, the developer building your new home becomes a cash buyer for your current property, meaning you are able to purchase one of their homes quicker and easier. The home builder will then sell your old property on your behalf.

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What Is Affordable Housing?


Affordable housing is defined by the government as either social rented, affordable rented or intermediate housing provided to specified, eligible households, whose needs are not met by the market.

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Should I Buy A New Build?


My Big Move were founded by building surveyors and have decades of experience in the property industry. In their expert opinion there are five good reasons why you should at least consider buying a new build home: security, specification, the chance to start the decorating from scratch, no buying chain and the goverment and financial schemes make it easy to get on the housing ladder when you buy this type of property.

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What Is A Freehold Property?


If you buy a freehold property, you will own both the dwelling and the land that it is built on. Your name will be listed in the land registry as the freeholder and it will be your responsibility to maintain both the property and the land. Most houses in the UK are normally sold as freehold, however some new homes can be sold as leasehold, so you should always check before buying.

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What Is A Leasehold Property?


If you buy a leasehold property, you own the dwelling, but not the land that it is built on. The ground the home is built on remains in the hands of the freeholder. Those living in a leasehold property will have to pay annual ground rent, and must also ask the freeholder if they wish to make any changes to the property - such as building an extension. The majority of leasehold properties in the UK are flats, but new homes can be sold as leasehold properties too.

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What Is Retirement Living?


Retirement living or retirement communities are housing developments designed specifically to meet the needs of older, retired or semi-retired adults. Most often these developments will have a minimum age restriction of approximately 55 to 60 years old and stipulate residents must be either semi or fully retired to be eligible for a home. Sometimes the term ‘private retirement housing’ is used to help distinguish these developments from the retirement housing offered by housing associations and councils, which is usually available for rent only.

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What Are The Differences Between Online And High Street Estate Agents?


Online estate agents offer many of the same services that high street estate agents do, however there are some differences such as cost and how much you will be involved personally with the selling of your home. Online estate agents tend to be cheaper, charging a fixed fee in order to sell your property. High street estate agents on the other hand charge commission, which can be anywhere between 0.5% - 3% + VAT of the selling price. Some online agents however will require you to do a lot of the legwork yourself, such as conducting home viewings and communicating with potential buyers directly, which can make the process of selling a home even more stressful if you're inexperienced. 

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What Is The NHBC Buildmark Warranty?


To sell a house with the NHBC Buildmark Warranty, the builder must build the property to the NHBC’s rigorous building standards. The NHBC Buildmark Warranty is much more than just a set of standards though. Under it, the builder is responsible for putting right certain defects and damage for the first two years after you complete your purchase. After these first two years are up, certain parts of your home are still covered under the NHBC Buildmark Warranty for the next eight years after you complete your purchase, giving you up to ten years’ cover in total.

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Will A New Build Save Money In Energy Bills?


Because new homes are fitted with double glazed windows and doors, have quality insulation in the roof and walls, efficient boilers and sophisticated water drainage systems, new homes built in England and Wales are on average 65% more energy efficient than a Victorian house of the same style - making them cheaper to run. 

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What is Council Tax?


Council Tax is a compulsory sum of money charged to persons based on their property size, cost and location. The amount you pay will be charged on an annual basis (a pay monthly option is available) and will be calculated based on bands. The bands are classed A (lowest) to H (highest) and are determined by a number of factors including, property value, property size, the amount of people living in your property and the location.

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What Is Stamp Duty?


Stamp Duty is a mandatory tax charged by the government when buying a new home. The rate you pay will be solely dependant on the value of your property. Changes are continually been made on stamp duty and most recent changes saw the calculation of stamp duty being based on a sliding scale rate meaning you only pay for the proportion of the property that’s at that rate rather than whole of the property at a fixed rate. 

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Why Is Buildings Insurance Important?


Having buildings insurance covers the structure of your home, any external buildings like garages, as well as fixtures or fittings such as bathroom suites or fitted kitchens. Many mortgage providers require you to have buildings insurance in place before they will lend you the money required to buy your new home. 

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What Is A Mortgage?


A mortgage is a loan agreement between an approved lender (bank, building society) and a person wanting to purchase a property. The lender will provide the funds to purchase your home at interest in exchange for title of the debtor of the property – which will become void when the debt is fully repaid. A mortgage usually runs for 25 years – however, some can be longer and some can be shorter depending on your needs.

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When Can I Start Redecorating A New Build?


With any new build, it's recommended that re-decorating the walls only take place after the walls have fully dried out. This process can take anywhere from 9-12 months, depending on your property type. Plasterboards dry much quicker than rendered brick walls, so it’s worth double checking with your builder. If you choose to go ahead and redecorate before the drying out process is complete then it’s important that you use a non-vinyl emulsion so that the walls can still breathe. Using wallpaper is a big no-no in the first year.

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What Home Improvements Add To Your Home's Market Value?


The basic rule is this – the more living space you create, the higher generally the price you can sell your house at.You should research your local area to get an idea how much properties with the improvements you are planning to make sell for, particularly those properties which are likely to be similar to your own. 

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What Bills Should I Plan For Now I've Moved Into My New Home?


The main bills almost all homeowners will have to pay and therefore plan for are council tax, mortgage payments, buildings and or contents insurance and utility bills. Ultility bills include water, gas and electricity and in most cases phone, internet and TV licensing as well. Then you will also need to consider your other monthly out goings that cover the cost of things that are vital to your lifestyle; such as car insurance and car finance, mobile phone bills, childcare costs, food and petrol bills.

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What Is Help To Buy?


Help-to-Buy is a collection of Government backed schemes designed to help more people become homeowners. The main schemes under Help-to-Buy are the Help-to-Buy Equity Loan, the Help-to-Buy Mortgage Guarantee and the Help-to-Buy ISA.

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What Is NewBuy?


The NewBuy scheme is similar to the Mortgage Guarantee but only applies to new build homes up to a purchase price of £500,000. There are some restrictions – the property must be your main home, owned wholly by you, and you’ll only get a NewBuy loan for homes built by builders participating in the scheme.The NewBuy scheme is only available in England, although there is an equivalent scheme for homes in Scotland.

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What Is Shared Ownership?


Shared ownership is a scheme that has been set up to help those who can’t fully afford to buy a property outright - it's essentially a cross between renting and buying. Shared ownership lets you buy a stake in a property that falls somewhere between 25% and 75% of the property’s value. This is achieved through a deposit and a mortgage, just as if you were going to buy the whole of the property. You will then have the opportunity to buy back shares when you can afford it, which is called staircasing. Typically you would be expected to buy a further 10% share as a minimum each time, and most housing associations will only let you staircase three times - the third and final time taking you up to 100% ownership of the property.

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Do I Need To Make A Will If I've Just Bought A New Home?


If you've bought a house then you have essentially increased your assets. Making a Will allows you to dictate who those assets, including any property, should pass on to when anything happens to you. Without a Will, you do not have that control and instead, your assets will pass under the Rules of Intestacy. 

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What Different Types Of Mortgage Are Available?


You will normally have to choose between an interest only mortgage and a repayment mortgage. With interest only, the amount you pay each month will cover the interest on your mortgage, but none of the capital meaning you will need to save in order to pay back the amount you borrowed in full. With a repayment mortgage, the monthly repayment you make will include the interest as well as some of the capital. Other mortgage types available include buy-to-let mortgages, combination and offset mortgages. 

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What Should I Do If My Mortgage Application Is Declined?


There are several reasons why a mortgage application might be declined, so one of the first things you will need to do is find out why. Too many mortgage applications can be detrimental to the success of an application. You will need to check that you are on the electoral role, as well as review your credit history, employment history and affordability. If you have any debt, look into clearing as much of it off as possible and reduce the number of financial commitments you have, such as gym memberships, as these can all affect your affordability. If you are worried about any aspect of your application then speak to your mortgage or financial advisor.

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Can I Back Out Of Buying A Property?


The good news is that whatever the reason might be, you can back out of buying a property. However most would agree there's a good time to do it and a bad time to do it. The good time to back out is any time before the contracts are exchanged. You can do so at this stage without incurring any legal or financial ramifications for doing so. The bad time to back out of a property purchase is once the contracts have been exchanged. Once exchanged, the agreement to buy the property is legally binding, and if you back out of a property purchase at this stage you should be prepared to incur the financial ramifications of doing so. 

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Is Buying Better Than Renting?


There are pros and cons that go with both buying and renting, so you should always think carefully about which option is right for you. There's no right or wrong anwswer - only do what best works for you. Whilst many would encourage you do buy if you're able to do so, remember that buying is a long term financial commitment and might not be right for you if you prefer to move home often. 
 
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How Many Times Your Income Can You Borrow For A Mortgage?


Traditionally a lender used to multiply your income by up to 5 times in order to determine your maximum mortgage value. However since new mortgage rules were introduced in April 2014, lenders must now determine whether borrowers can actually afford their mortgage repayments both at the current interest rate, and at an increased interest rate of as much as 6% or 7%. As such, how much a lender will loan you for your mortgage now depends on four key factors: your loan-to-value, your credit score, your outgoings and your income.

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Will My Student Loan Debt Affect My Mortgage Application?


Since the 2014 Mortgage Market Review, the rules on lending are much stricter than they ever were before. Lenders now take a detailed look at your credit history, income and outgoings when you apply to them for credit. The review recommended that lenders treat student loan debt as a "committed expenditure", meaning that they include your student loan repayments in calculations regarding your affordability. However, you shouldn't worry too much about your student loan debt if you're applying for a mortgage. Instead you should focus on any other debt you might have outstanding and aim to clear this off instead, as any debt on top of your student loan repayments is far more likely to have a detrimental impact on your application as it will all affect your affordability.

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What Does Buying Off-Plan Mean?


Buying a home off plan simply means that you buy the home before it's actually built. It might sound risky, but it's actually fairly commonplace and many people purchase a new build home this way. If a development is particularly popular, usually the only way to secure a property there will be to buy off-plan. Developers like to sell off-plan as it helps with cash flow and they prefer the guarantee that plots have sold. 


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Can I Get A Mortgage After Bankruptcy?


Bankruptcies usually last for a period of 12 months, at which point the person is discharged and the remainder of the debt is written off. After this period there are then some options available if you want to secure a mortgage. The best piece of advice is to leave things for as long as you can after you have been discharged from the bankruptcy. A bankruptcy order shows on your credit report for a minimum of 6 years, so even after you have been discharged after a 12 month period, it will still appear on your file for 5 more years. If you apply early for a mortgage after being discharged, it's likely that you will have to meet more stringent criteria, pay higher interest and need a larger deposit in order to secure a mortgage, however waiting longer and after the 6 year period will give you a better chance of securing a better mortgage deal. 

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