Finance is the part most first home buyers find confusing. Here is how it usually runs, from the first conversation to getting your keys.
Get your application ready
As a first home buyer you will generally need a deposit of at least 10%. Most banks want about half of that to be genuine savings, and KiwiSaver funds and gifts can count towards the rest.
A deposit of 20% or more usually brings lower interest rates, a bigger cash contribution from the bank and a more relaxed assessment. Under 20%, expect an interest premium, a valuation and stricter criteria.
Budget for the costs around the purchase too: valuation, building inspection, legal fees, insurance, rates and moving.
Lenders assess your income and spending closely. Credit facilities such as cards and overdrafts are counted as if fully drawn, and your repayments are tested at a rate typically 2 to 3 percentage points above the current variable rate.
The steps
Interview and pre-screening. A financial check-up covers your goals and the best lender for you. You get a checklist, and if you are not ready yet, we agree a plan and come back to it.
Documents. Typically an application form, proof of all income, statements for every bank account, existing loan and card statements, identification, employment contracts where relevant, and the sale and purchase agreement once you have found a property.
Approval and house hunting. Once the full application is in, approval usually comes with conditions, such as a valuation, closing credit cards, repaying debts or finalising the sale and purchase agreement. The lender must approve the property before you make an unconditional offer.
Structuring the loan. After you go unconditional, we finalise the structure. Rates can usually be locked in up to 60 days before settlement. You can split the loan into fixed portions, typically one to five years, and keep parts floating or revolving. The loan documents go to your solicitor to sign.
Moving in and beyond. On settlement day you collect your keys, and our advice stays available whenever you need it.
Thinking about buying?
Start with a free, no-obligation consult. Call 021 217 8208 or send an enquiry.
General information only. Lending is subject to each lender's criteria and approval.
