Are you considering getting into the property game with your first mortgage?
As a first homebuyer, there’s no better time to get started on the property ladder, with New Zealand interest rates currently at an all time low.
Buying a home is a huge financial commitment, and finding the right mortgage can be a confusing and frustrating process — especially for first-time homebuyers.
A common mistake is for fist homebuyers to shop around and acquire multiple credit searches on their credit file. This lowers the credit score and more and more banks these days will decline a mortgage application where there have been multiple credit searches in the recent past. A benefit of using a qualified mortgage broker is that usually only one credit search is carried out.
We’ve put together some useful tips to help you get started on your journey on the property ladder, with the best mortgage possible.
Improve your Credit Rating
Your credit history is important to lenders. While you’re preparing to buy a home, be sure you’re responsibly managing your current debt. Always pay your bills on time and chip away at your outstanding balances by paying more than the minimum.
Save for Your Home Loan Deposit
Although a 20% down payment on a mortgage is ideal, it’s not mandatory. As a first time buyer, you may not have a lot of money to put down as a deposit, meaning the loan-to-value ratio you need may be quite high.
iLender can offer solutions with a 10% deposit and also offer advice around gifting and guarantors. In June 2015 The Responsible Lending Code came into force which dramatically changed how banks view guarantors. It is vital to seek professional advice and at iLender we are happy to assist.
Expert mortgage brokers can help you with a solution for high loan-to-value ratio / low deposit loans.
Shop Around for a Lender, Let the Broker do it for you!
The process of buying a home involves more than just finding a good interest rate. You also have to find the best mortgage lender for your financial situation. No two sets of lender fees are alike, and it is important to structure the mortgage to suit you and not the bank.
If you’ve already applied for a home loan and been rejected by the banks, there are still lending solutions available to you. Non-bank lending can be a viable option for first home buyers whose loan applications have been rejected by the banks, due to:
- Bad credit history
- No proof of income (for example, self-employed)
- Low deposit
Research your options with New Zealand mortgage experts.
Budget, Budget, Budget
Your monthly mortgage payment won’t be the only expense you have as a homeowner. There’s also homeowner’s insurance, maintenance costs, and rates. This is why it’s necessary to develop a strong budget and get your broker to structure your mortgage to suit your income.
Draw up your budget and stick to it.
Consult a Qualified Mortgage Broker
The home buying process is a challenging one, which is why it helps to have the assistance of qualified professionals. An experienced mortgage broker can help you with the process, providing you with sound advice and financial options. They can also advise on the whole process and assist you at each step of the way.
The mortgage brokers at iLender are the experts in New Zealand mortgage solutions, particularly specialising in less straightforward situations such as low deposit, low documentation, refinancing, investment, and non-bank lending. iLender also assist those overseas buying in New Zealand.