28 Jan 4 Tips For Buying Your First Home
When it comes to buying your first home, it can feel a bit like navigating a minefield. It’s not surprising that so many first home buyers struggle to find their way through the home buying process. As buying a first home is likely to be your biggest investment – and your biggest expense – it’s worthwhile spending a little extra time understanding just what you’re getting yourself into. To help you get started, here are our 4 tips for buying your first home.
1. Talk to a Mortgage Adviser
While according to an article on Stuff the mortgage broking industry accounts for around 40 per cent of all mortgages written in New Zealand in 2020, further afield in countries like the UK, Mortgage Advisers write close to 75 per cent of all home loans in 2018. And when you consider the value that Mortgage Advisers add to the home buying process, it’s easy to see why more and more home buyers right here in New Zealand are choosing to work with a Mortgage Adviser too.
Mortgage Advisers like those at Max Mortgages – offer a range of services to make the process of obtaining a home loan as smooth and stress free as possible. Along with advice on the latest lending climate, a Mortgage Adviser can help you better understand your current financial position, and help you plan ahead if you’re not quite ready yet to buy your first home.
Our team of Mortgage Advisers work closely with you to find a financial product best suited to your personal circumstances, and then help prepare a solid home loan application that presents the deal in the best possible way. We know what “red flags” to look out for and avoid, and what can easily be done to strengthen an application and subsequently improve your chances of a successful application.
And because our team of Mortgage Advisers have access to a wide range of lenders – including both bank and non-bank lenders – we’re often able to get home loan approval for clients who have previously been turned down by lenders. In fact, it makes more sense to talk to a Mortgage Adviser first before applying for finance, so you avoid a potential decline which could limit your options for finance further down the track. Doing the preparation before you apply vastly improves your chances of a successful application and means you won’t have to wait and reapply later.
2. Get pre-approved for a mortgage
Before you start house hunting for your first home, talk to your Mortgage Adviser about securing a home loan pre-approval. A home loan pre-approval is a written acknowledgement from a lender that you can borrow a certain amount provided certain conditions are met. Conditions like having a registered valuation completed by an approved registered valuer, or ensuring you have house insurance in place.
With a home loan pre-approval, you know up front how much you can afford to buy for so you’re not wasting time looking for properties that are out of your budget. A home loan pre-approval allows you to move quickly and make an offer when you find a home you like, and could even place you in a better position to negotiate with the vendor. If you’re buying a home at auction, it is prudent to have your finance sorted as when you buy at auction it is immediately a binding contract with no cooling off period – so you need to have the comfort of knowing that you have your finance sorted
3. Find the right home
It’s easy to get disheartened when buying your first home. Spending every weekend going to open homes, searching online, and researching property market trends; most home buyers view hundreds of potential properties before finding the right one.
The key to success is perseverance – not giving up in your search for your dream home – and ensuring you have the right tools on hand. Like having access to key property data and knowing the property you’re buying is acceptable to the lender.
At Max Mortgages, we go one step further than simply helping you arrange finance. When you find a home you like, we’ll not only guide you through the home buying process, we’ll help you source useful data – like comparative sales in the area – to help you make good decisions about the home you’re considering buying. And because not all properties meet lenders’ criteria in terms of security, a Max Mortgages Adviser can work with you to quickly ensure the property you’re buying is acceptable to the lender and meets lenders’ requirements, so you can buy with confidence.
4. Pay your purchase deposit
Once your offer is accepted – or your bid wins the auction – you’ll need to pay a deposit when the agreement is signed. This is the amount over and above what you’re borrowing and will need to be paid to secure the property before it settles. While the purchase deposit is typically 10 per cent of the purchase price, don’t be afraid to negotiate the minimal amount.
If you’re using KiwiSaver to pay the purchase deposit, it’s important you arrange to have the funds released on time. And keep an eye on fluctuations to your KiwiSaver balance that could impact the total amount of your deposit. In 2020, for example, COVID-19 negatively impacted a number of KiwiSaver funds which meant many first home buyers were left short when it came to their deposit. Talk to your Mortgage Adviser about how to mitigate against any risk to your deposit.
Get the best advice for your home loans
We know that buying a first home is challenging, especially in a heated property market. If you’re wanting to buy your first home but you’ve been putting off making any decisions, contact the Max Mortgages team today to arrange a free, no-obligation chat about how you can move forward and buy your first home.Contact a Mortgage Adviser
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