Lending Tips for First-Time Home Buyers

Borrowing from a home lender can be confusing to the uninitiated. First-time buyers often need full, clear explanations, and mortgage brokers often find that many do not know much about home loans. The questions, answers and rules below can provide first-time buyers with the basic knowledge they’ll need to buy a home in New Zealand.

Is it Necessary to Have a Kiwi Saver Account?

Those not already enrolled in the Kiwi Saver programme should join as soon as possible. After just three years, the buyer can withdraw their contributions along with any made by an employer and put this money towards their new home. Some buyers may also be eligible for a Home Deposit Subsidy of $1000 per year, up to $5000.

Is it Possible to Get a Mortgage if the Buyer Has Other Loans and Debts?

Yes, it is possible to get a mortgage when other debts are in the picture. However, the buyer should take steps to minimise the debt to the extent possible. Other debts can reduce the amount for which a home buyer is eligible, but a home broker can tell buyers how to maximise opportunities by paying down debt.

Are Savings Essential?

First-time buyers should have savings to prove to the lender that they can effectively manage their money. A lender will be more willing to extend a home loan when the buyer proves that they can handle money in a reasonable, disciplined way.

What is a Property Security Deposit?

The security deposit is a predetermined amount to be paid to the estate agent or solicitor when the buyer’s financing is approved and the purchase contract is deemed unconditional. The deposit is typically negotiated as a percentage of the property’s value or as a dollar amount. It can be discussed with the real estate agent during negotiations.

Is Pre-Approved Financing a Good Idea?

A company that offers mortgage advice in Wellington may be able to help a buyer arrange a preapproval that is valid for six months. The preapproval will give the buyer an idea of how much home they can afford, and it will improve their chances of getting the home they want.

Buying a first home is exciting, but there are many factors for the new householder to consider. If you are looking for a home loan comparison or mortgage advice in Wellington, visit us at Wellington Mortgage Brokers (wellingtonmortgagebrokers.co.nz) today and get the best home loan rates.

Information on Finding Reliable Mortgage Advice in Wellington

Finding your dream home is just the first part of the process. Buyers must also secure financing to make their dream a reality. Working with a mortgage broker is an easy way to do it, as the broker can guide the buyer through the lending process from beginning to end. Most people have heard of mortgage brokers, but they may not know what these professionals do. Below, readers can find some more information about mortgage brokers in Wellington.

What Does a Mortgage Broker Do?

Mortgage brokers are best thought of as middlemen between borrowers and lenders. It is the broker’s job to work on the client’s behalf with New Zealand’s banks and to provide mortgage advice to potential homeowners. People often think that the terms “mortgage broker” and “loan officer” can be used interchangeably, but they are not the same.

Generally speaking, a mortgage broker is a regulated, licensed professional who works with a stable of reliable, established lenders. The broker does all the work, from gathering the necessary paperwork to pulling the client’s credit history and verifying their employment. Then, they use the information to apply for home loans on the buyer’s behalf.

How do Brokers Get Paid?

Like most professionals in the sales field, mortgage brokers receive a commission for services rendered. Most brokers charge loan origination fees, which are usually about one percent of the loan amount and are paid by the borrower during closing. However, some mortgage brokers negotiate no-fee loans to reduce the immediate burden on the borrower. Here, the broker receives payment after closing.

So, what makes a loan officer different from a mortgage broker? While a loan officer is a salaried employee of a lender, a mortgage broker works either with a firm or independently and earns most of his or her money in commissions. The bigger the loan, the higher the commission will be.

Don’t try to handle the lending process alone, visit Wellington Mortgage Brokers at www.wellingtonmortgagebrokers.co.nz for the most comprehensive mortgage broker advice in Wellington.