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First Time Home Buyers Guide
WHEN YOU ARE FIRST TIME HOME BUYER,
YOU NEED A LITTLE MORE HELP AND ATTENTION!
First time home buyers often need to become familiar with a number of factors before they can actually get on with the process of buying a house.Sometimes the excitement of deciding to buy a house can result in disappointment if you have not done your homework on what is required. Not all of us are in the right financial position to purchase a property at the time that we want, or need, to find a place to live. We have put together some information to help you better understand what the banks will be looking for, and hopefully, increase your chances of getting the home loan you want.
Key Factors
Some essential key factors you need to consider before purchasing:HOUSE DEPOSIT Each Bank / Lender has different criteria on how much deposit you need. If you have a deposit of 20% or more, you have a better chance of getting a home loan - but keep in mind that this is not the only criteria looked at by the bank.Once you are borrowing more than 80% of the purchase price of a property, the rules change and there will be more fees involved. It will probably also be harder to get the mortgage.There is a New Zealand government backed scheme, called Welcome Home Loans, that is specifically for First Time Home Buyers.
It has very specific criteria and is worth considering.
You can find the criteria here.Kiwisaver is a great way to save for your deposit if you are wanting to buy your first home. There are many New Zealanders now taking advantage of the ability to draw their deposit from their Kiwisaver. Learn more here. Keep in mind that each Kiwisaver provider has their own set of rules and fees.As with any decision, make sure you are fully aware of any additional costs you may incur. YOU CAN FIND MORE INFORMATION ON HOW TO GET YOUR HOUSE DEPOSIT HERE. YOUR INCOME How much you earn versus how much you want to borrow is another big factor. A calculation is used to work out the % of your income that would go towards your repayments - each lender has their own rules on how high they will allow that % to be.If you have dependents, e.g. children, parents, this will also be a factor in how far your income will stretch.If you are self-employed or a contractor, you will need to prove your income is consistent to take some of the risk out of the deal for the lender.YOUR CREDIT HISTORY A Credit Check will be done on all Loan Applicants.This is not just for first time buyers, but also if you are refinancing, so it really does pay to look after your credit history.If you have problems in your Credit History, it is recommended that you resolve those issues to improve your chances of getting the mortgage.THE REPAYMENTS The terms of the Loan will pretty much dictate what the repayments will be:
- Interest rate : fixed or floating
- the term of the loan, e.g. 20 years, 25 years, 30 years...
- any fees that may be added in to the loan
- administration costs from the bank
- etcHow often you make repayments will also be decided at the start of the loan, e.g weekly, fortnightly, monthly.Not all loans will allow you to make extra payments, so it is worth checking this out.Whether you can afford the repayments will be somewhat decided by the Lender. However, you also need to remain honest with yourself about whether you want to be tied in to a certain level of repayments.
Home Loan Calculator
Try out these Loan Mortgage Calculators to that will help you see what your repayments might be, the costs of a mortgage and more...
BENEFITS OF USING A MORTGAGE BROKEROne of the benefits of using a Mortgage Broker, for first time home buyers,is that they can quickly and easily talk you through the differences between different loans - and what that will mean to you.
Go from First Time Home Buyers to learn about Mortgage Broker
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