Porchester Palms

MONEY MATTERS

For most people, home mortgage is the biggest financial commitment they undertake. It can be an overwhelming process. Here are some pointers to get you started, especially useful if you’re a first home buyer.

1. Assess your financial situation. Know your incomings and be completely across your outgoings. This is information needed at the time of home loan approval. Squeaky clean accounts without surprises such as dishonoured direct debit payments go down well with financial institutions when assessing your ‘risk factor’.

2. Reduce your credit limits. Higher your credit card limits, lower your borrowing capability. Keep it low.

3. Deposit. Financial institutions do have the ability to lend to you even if you don’t have 20% of the buying price. However, this typically comes at an added interest cost. It is expected that you have save at least 5% yourself.

• If you’re struggling to get the 20% deposit as a first home buyer, you can borrow under the government’s Welcome Home Loan Scheme provided you have 10% of the deposit.
• If you’re in KiwiSaver and have been contributing to a scheme for at least three years, you may be eligible for a KiwiSaver HomeStart grant as a first home buyer. This could mean that the government gives you $5000 against an older home or $10,000 towards a new build.

4. Shop around for the best loan. Ask various banks for the best rate and loan terms they can offer. Don’t discount going through a mortgage broker too to rally for a best solution for you.