Mortgage for Off Plan Prperty Blog

Category : Investment

Looking to buy off-plan, but curious about mortgage options? This guide details everything you need to know to get started.  
 
Buying off-plan comes with numerous advantages for investors. But it also comes with many areas to consider, one of these being getting a mortgage. In this guide, we’ll be looking at getting a mortgage for your off-plan property, and tips to make the process as smooth as possible.  
 

Can I get an off-plan property mortgage?  

Buying off-plan involves purchasing a property before it’s fully built. There is often some confusion around whether you can get a mortgage for this type of property – the simple answer is, yes.  
 
You can get a mortgage for off-plan properties, but you’ll need to meet certain criteria different from a standard mortgage. It can be quite challenging to navigate, with many lenders often lending less, or not at all in some cases if you’re buying off-plan.  
 
Additionally, you may find you need to reapply for a mortgage if your property completion date is delayed, which comes with its own lengthy complications. This is why many investors opt to work with a specialist mortgage broker at this stage. 
 

Securing a Mortgage: Speaking with a mortgage broker

You may find it useful to speak with a specialist mortgage broker to discuss your options. As mentioned, lenders tend to be more hesitant when dealing with off-plan properties, so working with a mortgage broker can help soften this.  
 
Working with an experienced broker will give you access to:

  • Knowledge about which developers offer the best incentives - for example, paying your stamp duty so you can increase your deposit (strengthening your mortgage application)
  • Knowledge about which lenders offer mortgages for off-plan properties  
     

This all increases the chance of you securing a good mortgage with better interest rates.  
 

What are the eligibility criteria for off-plan mortgages?  

All lenders have different ways of assessing someone's eligibility for a mortgage, particularly when it comes to off-plan properties.  
 

Typically, a lender will look at:

  • A person’s deposit 
  • Employment type
  • Age
  • Credit history

They may also want to assess if your purchase price is fair.  
 

A specialist lender will often consider lending for an off-plan property, but it’s likely they will ask for a higher deposit compared to a standard buy-to-let-mortgage. This can be at least a 25% down payment.  
 

To summarise

  • Lenders are more hesitant to offer mortgages for off-plan properties  
  • Working with a specialist mortgage broker can help alleviate these concerns  
  • You may need a larger down payment than usual on and off-plan property 
     

Buying off-plan can be an intimidating process, particularly if you’re just starting out with this kind of investment. That's where working with a property management company like The Right Property Group can help. We guide you through the buying process, with an experienced team who make your investment both easy and profitable. Get in touch today to chat through your options.  

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