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Navigating Your Financing Options

Are you looking to purchase a property in Tauranga and wondering if you qualify for a mortgage? As a mortgage broker in Tauranga, we can help you explore all your options and find the best financing solution for you. By working with a variety of lenders and their different lending criteria and finance solutions, we can use our expertise and experience to determine which option will suit you best.

How Fast Can You Get Financing? Typically, it takes a minimum of three days to process a straightforward mortgage. However, if you’re borrowing more than 80% of the value of the property or have other special conditions, you should allow at least five to seven working days. By starting the process early, we can help ensure a smooth approval process.

Do You Need to Fill in a Lot of Forms? There is a significant amount of paperwork involved, but it’s worth investing the time to fill it out correctly. We’ll help you through the process. You’ll need to complete a financial statement detailing your income, assets, debts, and expenses. You’ll also need to provide proof of income and deposit and bring in several months of bank statements. This helps the lender determine how much you can afford to borrow. A credit check may also be performed.

What if You 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 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 pay it in cash.

Lenders will also require a registered valuation, which costs around $900 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 willing to lend you (subject to meeting a few standard conditions). Knowing that you are pre-approved for a certain amount makes house-hunting easier because you know your maximum budget, especially important at auction, where your purchase is unconditional.

Can I Use a Guarantor? Yes, if you’re struggling to make the full 20% deposit on your own, you can have a family member guarantee the difference, up to a maximum of 20%.

What is Vendor Finance?

Vendor finance is when the vendor keeps some of the equity in the property as a second mortgage, which you’ll have to pay back to them. This arrangement is charged interest at market rates and is less common, but can work in situations where you have no deposit but high income and no other debts.

What is a Second Mortgage?

A second mortgage is when you take out two mortgages on a property – one for the initial 80% of the purchase price, and a second for another 10%. This can help with a low-deposit situation, but it is less popular due to the tightening of the New Zealand mortgage market.

Can I Get a Mortgage for an Apartment, Townhouse or Empty Land?

Yes, you can. For townhouses, apartments, and lifestyle blocks under 10 hectares, you can borrow up to a maximum of 80% of the value of the property. For land, it varies from 70% to 80%, depending on the lender and the location of the land.

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.

At our Tauranga mortgage brokerage, we understand that the mortgage process can be overwhelming and confusing. That’s why we’re here to help. We’ll guide you through the process and make sure you understand all your options. Whether you’re a first-time homebuyer or a seasoned investor, we’ll work with you to find the best financing solution for your unique situation.

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