Getting ready


Find out what you can afford before you start seriously looking at and viewing properties.

The best way to do this is by searching online and making use of the many online mortgage calculators. Most banks offer mortgage calculators where you can enter terms for a mortgage and see what your repayments might look like.

It is also a jolly good idea to visit Sorted.org.nz for more information about:

  • how much you can afford to pay
  • how much the bank will lend
  • deposits
  • government help
  • credit reports

When doing your maths, don’t forget to consider the other costs associated with buying a house:

Reports
Most lending institutions will insist on you having a builder’s report and professional bank-approved valuation before they will lend you a dime. These reports don’t come cheap, but they are great peace of mind. If you choose to buy with Proppy the building maintenance report will be provided free of charge as all our vendors must complete a builder’s report before listing. And, if the vendor has agreed to show their valuation you are in luck again as this will also be available free to Proppy members. Result!

Moving costs
You will need to make an allowance for the cost of moving into your new home and to connect the phone, power and internet.

Ongoing annual costs
When you calculate what you can afford, don’t forget to include the cost of insurance, rates and if you are buying an apartment or similar, the cost of body corporate fees. And you must not forget repairs and maintenance. Staying on top of any repairs and maintenance will not only help you reduce costs, but it will improve the value of your property in the long term.

Getting a mortgage

Unless you win the lottery, you are going to need a mortgage (home loan).  A mortgage is a loan from a lending institution allowing you to borrow money to purchase the property on the condition that you pay it back in installments over a period of time (term). The catch is you have to pay interest on this loan and, the longer the term and higher the interest rate, the more you pay.

Choosing the right home loan for your circumstances is important  - so shop around for the best mortgage. You are under no obligation to stick with your regular bank.  Negotiate with the lender and don’t let them get you in too deep. You don’t want to overcommit yourself and find yourself with a 95% loan and be eating toast for 20 years! Just borrow what you need. And pay if off, as fast as you can. The quicker you pay it off the less interest you pay.

If you are uncomfortable dealing with a bank or lending institute then chat to a mortgage broker. They are experts in this field and will help you structure a loan to suit your lifestyle.

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