Applying for a home loan can be daunting but getting yourself in a good position before making an application will make the process much easier.
There are many things to cover when applying for a home loan but these four are consider essential.
DEPOSIT - how much can you throw into the pot as your contribution to the purchase of the property. At least 5% needs to come from genuine savings which includes your contributions to KiwiSaver, Deposit can also come from a family gift or loan or even the sale of another asset (car, boat, jet ski etc).
INCOME - you need sufficient income to repay the loan PLUS all your other living costs. Sources of income includes salary & wages, government support payments as well as rental and boarder income. There are different rules for commission income as we as investment income (e.g. shares).
DEBT - how much debt you have can materially impact on your borrowing ability. This is because the cash used in payments for these debts is not available to be used for a home loan repayment. Give the credit card the heave, ditch buy-now-pay-later accounts and pay off your higher interest rate debt first.
SPENDING - living within your means shows lenders that you will be able to afford repayments and be prepared to modify your discretional spending after getting a home loan. The last thing anyone wants is to have anyone suffering financial hardship after taking on a home loan so making it very evident you can afford things is very helpful.
Working with a mortgage broker really helps the application process!
Click here for mortgage advice in Napier , Hastings and Havelock North or reach out below.
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