This could be the largest asset that you could be purchasing. The process could be extremely satisfying but also a very stressful time. Good planning and sensible advice can make the process a lot easier.
The key questions you might have may include;
- How much deposit do I need?
- What will the repayments be?
- Which is the best lender?
- Should I use a Mortgage Adviser?
- What else do I need to know?
Why use Connect Finance as your Mortgage Advisor
We have access to a range of banks and other lenders and the experience and knowledge to help you get the best mortgage and show you how to structure the mortgage so you can pay it off quicker.
We are also able to help you through the whole process of buying your first home. We want to make the process as easy as possible for you!
As a Mortgage Advisor, we can look into getting your loans pre-approved by the lending institutions to allow you to do the important bits (like choosing your new property!)
Ask us if in doubt. We have seen many people just like you and are used to dealing with the excitement and stress that often come when buying your first home.
Deposit requirements vary between lenders and criteria changes over time. While most lenders state the ideal deposit to be 20% of the purchase price there are lenders that lend with deposits as low as 10% and even sometimes lower.
It’s important to note that Lenders will often require evidence that at least some of the deposit is genuinely saved and can be demonstrated with a minimum of 3-months savings history in either a bank account or investment including Kiwi Saver.
If you are a first home buyer and have been in Kiwi Saver for at least 3 years you may be eligible to withdraw up to the amount you and your employer have contributed. You may also be eligible to access a first home deposit subsidy which is available from Housing New Zealand. Previous home buyers may also be eligible to withdraw from their Kiwi Saver and a deposit subsidy but must first apply for approval.
In some cases you might qualify and benefit from the Welcome Home Loan package where you may be able to borrow up to 90% of the purchase price.
Your deposit can be your saving or a gift. It can also be an available equity in another property which may be your own or someone else – like parents. Such a property is mortgaged to the lender and the owner/s of the property guarantee/s the loan extended to you for the amount of margin money. After a few years, generally five, when your loan amount reduces and home value increases, banks release the guarantee and remove mortgage from guarantor’s property. Independent legal advice will need to be sought by the Guarantors.
Connect Finance Limited can advise you on what your level of deposit you will need.
Keeping up with the loan repayments is of paramount importance and without putting yourself under too much financial pressure when you buy your first home.
Other issues that need to be considered associated with owing your own home, are
- council rates,
- house insurance,
- life/mortgage repayment insurances,
- repairs and maintenance and
- body corporate fees.
It is also important that you plan for times when interest rates may increase, or if your income decreases e.g. you start a family.
Connect Finance can advise you on mortgage repayments and also show you how to pay off your mortgage faster.
Which is the best Lender?
When looking to see which Lender can meet your requirements best, most people take the following into consideration:
- which is the best Bank and
- which Bank/Lender offers the lowest cost by way of lowest interest rates
The answer varies for each individual situation and we at Connect Finance can advise you once we have a clear picture of your financial situation and requirements.
When comparing lenders you need to consider a number of factors including which lenders consistently have competitive interest rates, lower account fees and offer you the most suited loan structure.
For first home buyers with a low deposit you will need to consider what additional costs the lender charges. These are referred to as Low Equity Fees or Low Equity Margins and these vary considerably.