We are here to help you every step of the way!
Purchasing your first home is so much more than checking out a few properties! It’s about planning your future, and is likely one of the biggest financial commitments you’ll ever make. Whilst buying your first home can often feel daunting, we are here to guide you through the process.
One of our experienced National Finance Advisers will navigate you through everything you need to know about the home buying process so that your experience of getting onto the property ladder runs as smoothly and as stress free as possible.
How can a National Finance Adviser help you?
In addition to comparing interest rate and loan structures to help you find the best possible loan option to suit your needs, a National Finance Adviser can also help you with:
- How much deposit you will need?
- Cash gifts/guarantor loans
- Assist you with KiwiSaver and Government Grants
- How much you can afford to borrow?
- Work out what your repayments will be
- Getting your mortgage pre-approved
- Compare lenders to find the most suitable loan option for your needs
- Access property reports on potential homes and arrange inspections/evaluations
- Look over your LIM, Sale and Purchase agreement and building inspection reports (as well as translate all the jargon for you)
- Help with any other questions you may have, big or small!
We have also put together additional information you need to get started with a handy free First Home Buyers Guide!
Gather Your Deposit
One of the most common questions in the home buying process is how much deposit is needed for a home loan. When it comes to deposits, the more the better. You may be familiar with the ideal 20%. A larger deposit will help you avoid paying low equity fees/lenders mortgage insurance and also opens up additional types of loans and lenders accessible to you. This not only gives you the most competitive rates but it also means you don’t have to pay extra interest down the track. Whilst it is still possible to get a home loan with a much smaller deposit there are a number of possible ways to maximise your deposit.
Gifted Funds
Most banks like to see evidence of genuine savings when applying for a mortgage, which means you will need to have the deposit in your account for a minimum period of time and often up to 5% needs to be from accrued savings. However, if you acquire money that hasn’t been saved in this way and want to use it towards your deposit, a National Finance Adviser will be able to provide options from lenders that accept these deposits.
Bank of Mum & Dad
A guarantor is someone who will offer their own assets as collateral for the loan. Parents often offer to be guarantors for their children to help them into their first home. The guarantor will determine what portion of the loan they will secure, usually it will be for the part of the deposit you don’t have. This guaranteed portion will usually be secured over their property, much like putting a ‘hold’ onto their existing equity until it is paid back. A guaranteed home loan means you may be able to buy your home sooner than expected and maximizes the amount you can borrow, you can expect great interest rates/fees and possibly a bank cash contribution. However this is a big decision as the guarantor is liable to pay if you default on your loan which means you need to be absolutely sure you will be able to meet your mortgage repayments.
Low Deposit Home Loans
If you have considered the above options and still struggling to meet the ideal 20% deposit, the good news is that there are still some great options. You may be able to apply for a First Home Loan which a product supported by the Government and operated by Kainga Ora – Homes and Communities which allows for lending with 5% deposit. Your National Finance adviser will be able to discuss all of the above options to see if any would be suitable for your circumstances and help you with any further information required or getting application process underway.
How Much Can I Borrow?
Wanting to find out how much you can borrow and what the resulting repayments will look like? You can often get approval to borrow more than you can actually afford! New home buyers forget about extra costs such as rates, extra insurances, repairs and maintenance or body corporate fees. So we’ve created this handy mortgage calculator to give you an idea on how much you can comfortably afford to borrow. Alternatively, you can use it to see how the amount changes depending on how the term, interest rate or total mortgage amount changes for instances such as increases in interest rates or if your income decreases. Your National Finance Adviser will be able to further advise on the above and even offer solutions as to how you could pay off your mortgage faster!
Pre Approval
Once you’ve got your deposit and are ready to start house hunting, the next step in the process is to get pre-approval. This can help cut down stress and organizing time, as you will know just how much you can afford to borrow and the price range for your search. You will be in a better position to negotiate a good price on the property you intend to purchase and confidence if bidding for a property by auction. Whilst the pre-approval sets the benchmark, you will still need to find a property that the lender is happy with. For this reason it pays to double check with your adviser before you sign a contract or go to auction for a specific property. Contact a National Finance adviser to help organise your pre-approval. Ready to get going? Find an adviser today!
