Buying a home is one of the most exciting and daunting things that we ever do in our lives but there is help available. For some of us our first home will be a tiny house and others will jump straight into something larger.
If you are just starting to explore your home ownership options it’s time to start thinking how to apply for a home loan with the aim of getting a mortgage pre-approval.
Too Many Options
There is a wide range of New Zealand home loans available for you to choose from from the various banks and non-bank lenders. You do not need to just approach the bank that you have your accounts with either as often it will be another bank that is able to provide the best lending offer to you.
You can use online mortgage calculators which can help give you a clear idea about how much money you may be able to borrow from home loan providers as well as your estimated mortgage repayment options.
Of course speaking to mortgage brokers is a good starting point as they have the experience in getting finance and know how to apply for a home loan on your behalf.
What You Need To Provide
Although the following isn’t an exhaustive list of all that you need to do to be fully prepared to apply for a New Zealand home loan, it should provide you with enough information to get started.
Being informed will give you knowledge and confidence to take the first steps toward your first home ownership.
Have Proof Of Your Income
All financial institutions will want you to prove that you have a regular income to make sure that you are able to make mortgage payments without putting yourself under financial pressure. They will ask you to produce payslips or up to date financial statements before you can begin your home loan application.
Debts and Outgoings
The lending institution will also want to see proof of all of your financial outgoings, such as current loan balances, credit card liabilities, any hire purchase agreements or store cards you may have.
Using an online mortgage calculator can help you to be clear about what you are spending monthly before you go through the mortgage application process.
Evidence of Your Deposit
You will have to show proof of your home loan deposit or if you’re using your Kiwisaver savings you will need to get your provider to provide a written balance estimate.
Bank History
If you are not banking with the mortgage supplier that you are applying for the loan with, you will usually need to provide at least six months of bank statements. These statements will need to clearly show the banks details, your name (or joint names if you have an account with another person) and it must show the running balance over the required period of time.
Identification
Make sure that you have two forms of ID, including a photo ID, if you are using a lending institution other than your usual bank. If you are already a customer of the home loan provider one form of ID will usually be adequate.
Proof of Your Address
You will need to make sure you have a way of proving your current address. Utility bills or recent bank statements are usually fine. Your lending institution will let you know exactly what you need.
Selecting The Right Home Loan
Give yourself time to research what home loan rates are currently available.
Talk to a mortgage broker to see if they can do some of the hard work for you. Comparing the mortgage rates from banks, credit unions and other non-bank lenders can help you find the best rate. Then you need to decide how you want to structure your loan.
Comparing mortgage rates, fixed or floating, interest only repayments, interest and principle repayments, interest rate options and using online home loan calculators will help you to make the decision about which home loan is right for you.
It can be surprising how much money you can save over the term of your home loan by using various strategies of mortgage repayments. Choosing to pay off your loan weekly or fortnightly (if this is an option) can end up saving you thousands and thousands of dollars.
To feel completely confident about taking the step of applying for a home loan be prepared to do some research. Talk to trusted financial advisors, friends and family, use the services of a dedicated mortgage lending specialist and have a good grasp of your current financial commitments.
Then you will ready to take action – to buy your first home.
Many lending institutions make it easy to apply for a home loan through their websites and face to face mortgage specialists. Ask lots of questions so you know you are well and truly primed to apply for your mortgage.
Use the services of a dedicated mortgage broker.
They are lending specialists that can apply for a home loan with the right bank or non-bank lender.
