| This article has been written for the New Zealand | | | | hire purchase, credit cards, child support. |
| home market and is designed to assist you on how to | | | | If 1, 2 and 3 meet with the lenders criteria - the lender |
| get a home loan mortgage to buy property in New | | | | will be able to provide you with a pre approved |
| Zealand - whether you want to buy your very first | | | | mortgage certificate; this states how much they are |
| home or maybe you already have a home and want | | | | happy to lend to... do note though, this will be subject to |
| to move on to another, or you are a New Zealand | | | | conditions and will include what property you buy and |
| resident working abroad and want to buy property. | | | | may require a valuation for varying types of property, |
| WHAT IS A LOAN PRE-APPROVAL? | | | | and anything else that may apply. |
| This is the most important part of the process - if you | | | | SECURITY |
| obtain a "pre-approved" home loan mortgage it will | | | | This is the house or property you are purchasing. Most |
| assist you with determining your parameters. What | | | | lenders are comfortable to lend against a traditional |
| that means is; as to the price of the property - how | | | | stand alone residential property located in an urban |
| much you can spend, area to purchase, and the | | | | environment. Beware though, of non standard |
| upfront economics of the decision to buy a house - | | | | properties, some lenders view - apartments, terraced |
| this is a long term commitment, the more information | | | | houses, life style blocks and some vacant land as 'non |
| you have at the start the better off you'll be. So what | | | | standard'. Most lenders will require a valuation on these |
| is a pre-approval, this is where a lender/bank has pre | | | | types of property. |
| approved a home loan mortgage up to a certain | | | | VALUATIONS |
| amount and possibly conditional on other factors like | | | | If you require a valuation ask your Mortgage Broker |
| the type of property, which is the security they will use. | | | | for a referral as some lenders have a specific |
| HOW DO I GET A LOAN PRE-APPROVAL | | | | requirement and this will eliminate any expensive |
| To obtain a pre approval a lender will need to look at | | | | mistakes. |
| the following: | | | | REFINANCE selling one house and buying another... |
| [1] Your deposit; how much is the deposit and what is | | | | It pays to check your figures and check again! When |
| its origin. They will be looking for a deposit over 5% | | | | you do have a pre approval, double check your |
| and one that has an element of savings for what the | | | | deposit will be what it needs to be. This is especially |
| lender refers to as "hurt money". A higher deposit will | | | | important if you are selling your existing property to |
| always be more positively received by a lender; | | | | provide the deposit for a new purchase - will there be |
| however funding is available for the lower equity | | | | enough money on settlement day? Get your |
| purchases, but can be a little more expensive. | | | | Mortgage Broker to work through this with you and |
| [2] Your income and the lender will be looking for | | | | confirm the figures. If you are using funds held in an |
| stability of earnings and a reasonable margin of | | | | investment or from family sources, check that these |
| uncommitted income. However those in relatively new | | | | are immediately available. If you sign an agreement it is |
| jobs can obtain funding but may need to provide more | | | | a binding contract. |
| detail of previous employment. | | | | THE PURCHASE - time to shop |
| [3] Your bank statements; the lender will want to view | | | | Now you are ready to go shopping you will need to |
| the last 3 months bank statements to ensure the | | | | find a Real Estate Agent and again your Mortgage |
| applicant is living within their means and that they can | | | | Broker will be able to recommend a good agent to suit |
| demonstrate a clear ability to manage their financial | | | | your needs if required. |
| affairs. It is from this source they will determine the | | | | Co-Author Phillip Gilmour of Mortgage People Limited, |
| applicants other financial commitments, for example | | | | Auckland, New Zealand. |