Frequently asked questions

  • What is a pre-approval?

    It is essentially a mortgage approval subject to certain conditions being met such as a Sale and purchase agreement, Registered Valuation (if less than 20% deposit), confirmation of deposit (savings, Kiwisaver, term deposit, shares etc). There maybe additional conditions depending on the property, and what supporting information wasn't provided at the beginning.

    When you have a pre-approval you know how much you can borrow which will put you in a better position to negotiate. Pre-approvals are valid from 60-90 days.

  • How long does it take to get a home loan pre-approval?

    From the time we receive all the necessary supporting information we can usually obtain an approval within 2-3 days. However, the Banks can be a bit slow from time to time.

  • What is the Home loan process?

    We review your loan application and discuss your options

    • As soon as possible after you complete the application pages, your loan application is reviewed.
    • Your mortgage advisor will contact you to discuss what financing options are available to you. The objective is to understand your requirements and to explain why some options may be preferable to others (this is a good time for us to answer any questions you have)
    • We may need additional information such as pay slips, or bank statements. We will tell you what is required so you have a simple list of things we need

    We'll send your loan application to the Banks for approval

    • After we receive the various documents, we will compile a loan application for the preferred lender. By this stage, we have generally narrowed the preferred lenders down to one or two options.
    • Depending on the complexity of the proposal, we would normally receive a loan offer within 2 days (it maybe longer depending on Bank turnaround time).
    • We will contact you to discuss the loan offer and to explain any conditions that need to be dealt with prior to making an offer on a property
    • A Registered valuation, or other documents maybe needed for the Bank to provide an unconditional loan offer for a particular property (we will coordinate this with you)

    We discuss interest rates and home loan options and finalize your loan structure

    • We will help you to establish a suitable mix of home loan products and interest rate structures that will help you to achieve your goals.
    • When your loan structure is set and your finance approval is unconditional, we will provide full details to your solicitor so that there are no mistakes in the loan and mortgage documentation.
    • Finally, we ensure that loan documents and instructions are issued to your solicitor in time for settlement.
  • How much can I borrow?

    It really comes down to Income, Deposit amount, Financial commitments that will remain in place after you buy a property (Childcare, child support, dependents, credit card limits, hire purchases, personal loans, Kiwisaver deductions, insurance premiums, student loan deductions etc), Property type, and Credit check. If you have a 20% deposit the amount you can borrow will be higher as Banks use a stricter affordability formula when the deposit is less than 20%. Internet calculators will give you an indication but they can be a long way off what a Bank will actually approve as there are many other variables the Bank considers which these calculators don't take into account

  • Can I borrow over 80%?

    All Banks lend between 80%-90% to buy an owner occupied property but they tend to assist their own customers first but other Banks will consider your application. Banks usually like to see minimal unsecured debt with over 80% lending. 95% loans are available but there are restrictions from the Banks on what value the property can be, and only some Banks offer 95% loans. With over 80% borrowing Banks charge a low equity margin which adds a small percentage onto the interest rate because of the increased risk to them. The low equity margin may also be added on as an upfront fee rather than having an interest rate margin added onto the interest rate. A Registered valuation is compulsory for higher than 80% loans.

  • What conditions shall I put in my offer?

    If it is an Auction you wont be able to insert Conditions as you have to be unconditional to bid at auction, but if it is an offer by negotiation or tender you maybe able to include some of the following Conditions:

    • Finance - This gives you time to meet the Conditions the bank has stated on your approval letter. Usually 5-10 working days
    • Valuation report - This is an independent professional assessment of the market value of the property.
    • LIM report - So you can check what the council knows about the property and make sure there are no problems with things like building consents or flooding.
    • Building inspection - A good building report will state whether the building is sound and will identify any problems that might cost money to fix. A report of this nature is a wise and increasingly common precaution.
    • Toxicology report
    • Title search - Your lawyer should check that there are no problems with the title or restrictions, covenants or easements that you need to know about.
    • Engineering report - An investigation of structural issues or the stability of the land.
    • Sale of property - You may need to sell your property before you are committed to buying another property. This can be accommodated in your offer
  • What costs could be involved in buying a home?
    • Solicitor fees - estimate $900 - $2,000
    • Building inspection fee - estimate $500 to $800
    • Registered Valuation - estimate $800 to $1100
    • LIM (Land Information Memorandum) - estimate $250 to $500
    • Risk insurance - there are insurance products that can help to repay a mortgage if ill heath or other circumstances mean you cannot repay the loan
    • Land rates, House insurance, Power
    • Moving costs
  • What is Bank lending criteria?

    In the current market every bank’s lending criteria is different. There is no point dealing with the bank directly because they can only give you one solution, and if they decline you need to start from scratch and go to another bank. Every time you go to another bank they do a credit check and it doesn’t take long for it to look like no one wants to give you a mortgage

    We work on your behalf and can see from your application which bank will be a good ‘fit’ for you from the outset

    We have worked with people who have ended up so frustrated dealing with the bank on their own behalf and who have missed out on property as a result. Since we work with the various banks on a daily basis, we know what the banks are looking for and the hooks to look out for. We are seeing a number of clients that get quite far through the process to then discover problems with finance

  • What is a mortgage?

    A mortgage is the instrument represented by a legal document that gives a lender a security interest in a property. The borrower (mortgagor) uses a mortgage to pledge the property to the lender (mortgagee) as security against the debt for the rest of the value of the property.

  • How does Settlement work?

    On settlement day you pay for your house and its ownership (the legal title) changes from the previous owner to you. From your perspective it is simple, but in the background the money needs to change hands, your new ownership is recorded on the title and the bank's mortgage is registered, and this involves your lawyer

    You will have usually paid a deposit and on settlement day you need to pay the rest of the purchase price. In most cases, some or all of this money will be coming from a bank. Drawing down your loan from the bank is taken care of by your lawyer

Do you have any questions?