Borrowing and Mortgages
So you have made the decision to purchase your first home or your next home. Now what? For most, the first step is to figure out how much you can borrow and what needs to be done to secure the loan. You really have two options here, contact banks yourself, or approach a mortgage broker to do it for you.
Should I use a mortgage broker or talk to banks myself?
A mortgage broker brings you no direct costs with the lenders paying the commission. A broker or adviser can often get the lastest, non advertised rates and know what is competitive on a week to week basis so can get you a good deal. Brokers can also open your options to lenders you might not think of approaching, for example second tier building societies or banks. However, brokers can be restricted by the banks or lenders they have a relationship with, so be aware that they may not approach all lenders.
Approaching banks yourself can bring its advantages. Borrowers who are up to date with mortgage rates and are comfortable negotiating might like to talk to lenders themselves. You can search for mortgage rates aggregator sites to give you a starting point and join online communities for advice. You should go into these discussions knowing what rates borrowers have been getting recently, which can be considerably lower than the advertised rate. Also other incentives that lender may offer such as cashback they may offer.
Should I Expect Cashback?
It’s common practice for banks to give cashback to borrowers and this is sometimes even advertised. Knowing what to expect can be difficult and changes regularly. Ask your lender what the cashback contribution will be or you mortgage adviser can help you with expectations.
How much can I borrow?
Another one of the big questions and perhaps the most important is how much will a lender loan to you, and how much you should take.
Lenders will test borrowers on a number of criteria including income and spending to assess how much they are comfortable lending. Talk to your bank or broker about these criteria or use a mortgage calculator to find out.
Preparing to apply for a home loan
Before applying for your home loan there are a number of tasks that will give you a better shot at getting the loan and mortgage rate you need. A lender will typically request 3 – 5 months of bank statements prior to approving a loan. Although you want to be genuine in your spending habits leading up to applying for a loan, it’s a good idea not to be making big purchases and keep you spending reasonable. Keeping your bank accounts in good order and organised can also be to your advantage so that the loan assessor can clearly see your history. Ensure you have reduced or cleared any bad debts before applying for a loan. Pay off any credit card, hire purchase or personal loan debt as any liability will count against you.
Find your Real Estate Agent with Aframe
All of these factors can be discussed once you find your Real Estate Agent. Finding a local expert who can assess your property is the best way to decide when you should sell. A Real Estate Agent can also best advice on marketing strategies, help you prepare your home and advice on staging.
The easiest place to start your search for a local expert is aframe.co.nz.
When you list your property on Aframe with some basic details, Real Estate Agents will provide quotes. You can even specifically ask for advice on the best time to sell, then chat with agents in an anonymous, pressure free environment using Aframe Chat. Aframe allows you to compare Real Estate Agent commission and cost structures, as well as get you know your agent and compare advise.