Can I get a mortgage?
In most cases, yes! We can help you explore all your options because we deal with many different lenders. Because they all have different lending criteria and finance solutions, we can use our expertise and experience to work out which one will suit you best.
How quickly can I get finance?
Normally, it takes a minimum of three days to process a straightforward mortgage. If you’re borrowing more than 80% of the value of the property, or there are other special conditions, you should allow at least five to seven working days. If you start talking to us now, we can help you get all your ducks in a row to make the approval process go more smoothly.
Do I need to fill in a lot of forms?
There is quite a bit of paperwork involved, but it’s worth investing the time in filling it in correctly, and we’ll help you through the process. First, you’ll need to complete financial statement detailing your income, assets, debts and expenses. Next, you’ll need to provide proof of your income and your deposit. You’ll also need to bring in a few months’ worth of bank statements. These help the lender to work out how much you can afford to borrow. A credit check may also be performed.
What if I don’t have a 20% deposit?
You may still be able to get a mortgage if you need to borrow more than 80% of the property’s value, as long as you have good income and no other debts. However, borrowing over 80% will cost you more, as most lenders charge a low equity fee of up to 2.5%, or increase your interest rate by between 0.5% and 1.0%. You can add the low equity fee to the mortgage if you can’t cover it in cash.
You’ll be restricted as to the amount you can borrow if your loan is over 80%. At under 80%, you can borrow five times your income, but at 90% this decreases to four times your income because the lender will require you to pay off your mortgage more quickly.
Lenders will also require a registered valuation, which costs around $500, and it will be compulsory to arrange and maintain either mortgage repayment or income protection insurance, to ensure the debt will be repaid in the event you become seriously ill or injured.
What does pre-approval mean?
Pre-approval is when a lender confirms the amount they are happy to lend you (subject to you meeting a few standard conditions). Knowing that you are pre-approved for a certain amount makes house-hunting much easier because you know exactly what your maximum budget is. This is especially important at auction, where your purchase is unconditional.
Can I use a guarantor?
Yes, you can. If you’re struggling to make up the full 20% deposit on your own, you can have a family member guarantee the difference, up to a maximum of 20%.
What’s vendor finance?
This is where the vendor keeps some of the equity in the property as a second mortgage, which you’ll have to pay back to them. Normally this arrangement is charged interest at market rates. While uncommon, vendor finance can work in situations where you have no deposit, but high income and no other debts.
What is a second mortgage?
This is where you take out two mortgages on a property – one for the initial 80% of the purchase price, and a second for another 10%. While this can help with a low-deposit situation, the tightening of the New Zealand mortgage market means second mortgages are much less popular than they used to be.
Can I get a mortgage for an apartment, townhouse or empty land?
Yes, you can. In the case of townhouses, apartments and lifestyle blocks under 10 hectares, you can borrow up to a maximum of 80% of the value of the property. With land, it varies from 70% to 80% depending on who is lending the money and where the land is located.
What if I want to build?
If you’re building a new house, we may be able to secure you a mortgage for up to 90% of the value of the completed property, although many lenders prefer 80%. Always get a fixed priced contract from a master or certified builder, which comes with a workmanship guarantee.
Because you’re borrowing against a house that is not yet completed, you’ll need to get a registered valuation based on the land value and architect’s plans. You won’t get all the money up front, but in stages, as agreed by the lender and the builder. These are called progress payments. The lender may also ask for interim valuations along the way to make sure the build is staying to budget and expected value.
Can I get a mortgage if I’m a non-resident?
Yes, with some conditions. If you don’t live in New Zealand, you’ll be restricted to borrowing a maximum of 70% of the property’s value. If you work in New Zealand but aren’t a permanent resident, the borrowing cap rises to a maximum of 80%.