Home loans are a minefield for the average person. The different types of loans, repayment schedules, interest rates, set up costs… the fine print can make the mortgage process difficult to navigate. At MortgageDesign our job is to make it simple for you.
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.
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 5%? The usual deposit required in todays mortgage market.
When contemplating the amount you will need for a deposit consider this: If you think its too good to be true- it likely is. This is particularly true when it comes to home loan deposits.
Companies advertising a minimum deposit of 0%-5% you should be skeptical about – not only do they tend to charge you higher interest rates, but they also often lend unfeasible amounts of money, amounts which may be too difficult to pay back.
What size mortgage can I afford?
How much is your annual household wage?
If your mortgage will exceed 4-5 times your household wage it may be time to delay buying a home, or downsize your aspirations – an excessively sized mortgage will be difficult, if not impossible to pay off.
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 MortgageDesign today for an obligation free consultation on 09 242 1975 about the offers that may be available to you.