Buying a home can be challenging and exciting, and requires a great deal of thought, careful planning. Everyone dream of owning their home and it takes a lot of planning, and is a great financial obligation to pay off the loan. Expert advice is needed to secure a loan at a lower interest rate, and the shorter the term, the greater the return on the property. There are different options on the type of loan you take.
Home Loan Options
Financing option depends on what you want to achieve. By increasing the payments; the term of your loan will be shortened, giving you access to home equity.
Most regard the home as an investment, and securing a loan at a lower interest rate and shorter term will impact the cost and the return
Buying a home can be challenging and exciting, and require a great deal of thought, careful planning, and budgeting as there are a number of factors to consider like amount, legal fees, rates, ongoing maintenance, and insurance among other costs. The financial commitments are daunting, and it is important that the best agreement is entered into to save in interest and fees over the term of the loan.
Minimum of 5 – 20% required with some exceptions
Welcome Home Loan Scheme
- Must be a New Zealand citizen or permanent resident
- First home buyer, 10% deposit
- Cannot be used to buy an investment or rental property
- Cannot own any other property
- Maximum gross annual income of $85 000 or with a partner combined $130 000
- Regional house price cap of $650 000 (Auckland), major cities ($550 000)
- Have Lender’s Mortgage Insurance (LMI) of 1% of the loan
After three years of regular contribution:
- $1,000 for each year of contribution up to maximum of $10 000 and property purchased with other people $20,000 (new home)
- Lender may have the home for a mortgagee sale to recover money if unable to service the loan
- Negative equity is when the borrowing is more than the value of the home, and lender may take action to recover balance
If unable to make repayments, seek a financial adviser before a mortgagee sale
David Luke, Financial Advisor
Phone: 021 0229 7560