First of all, what is a Home Loan?

A home loan is when a mortgage broker arranges to get a lender to loan you an amount of money to purchase a home. This is done via a legally binding agreement with set rules in place regarding interest rates, repayments, set up costs etc. You should have your own lawyer that will be able to handle the legal aspects of purchasing a house when you find the right property.

Where to begin with a mortgage

Here are some handy hints to help you on your way to a new home.

Look at your budget – consider:

How much money do you have saved?

What is the average house price in the area you want to buy in? Location is always an important factor to consider when buying a house.

What is the average house price in your desired area or do you have a specific value in mind?

If you were to take a mortgage, what proportion would you have saved currently or be able to access through Kiwi Saver or gifting?

Is this value in excess of the minimum 5%?. The usual deposit is 10% however if clients wish to have the best terms and rates offered to them then 20% deposit is the preferred. 

When contemplating the amount you will need for a deposit you need to consider the restrictions the Reserve Bank has forced on to the banks with deposits under 20% and the subsequent effect this has had with the availability of funding from the banks. 

What size mortgage can I afford?

How much is your annual household income and expenses?

If your mortgage will exceed 5 times your household wage it may be time to delay buying a home, or downsize your aspirations – an excessively sized mortgage may be difficult, but your personal budget based on realistic figures and proposed expenditure will likely prove this and is well worth spending time on completing which Finance Choice can assist with editable budgets.

If all of this sounds achievable to you, check out the types of home loan available on the links to your left for additional information.

Further Questions? Ready to take the next step towards your first home?

Contact Finance Choice today for a no obligation free consultation on (09) 889-6858 about the offers that may be available to you.