It is important that you surround yourself with a trusted team of experts as you embark on this new and exciting life stage. Your ‘A-Team’ may include a lender such as your bank or a mortgage broker, a residential property lawyer, and an insurer.
Your mortgage broker, bank, or financial lender will help you work out the overall budget that you’ll need to work within to buy your new home. They will discuss your deposit requirements, loan options, and what your mortgage repayments could be. They will also organise pre-approval which involves assessing your current financial position including income and debt, and advising an approved amount you can borrow as a mortgage. Your bank may require a home valuation, as they need to confirm the house is worth the amount you are paying for it.
There is no obligation to stay with your current bank, so shop around, as another financial lending provider may be able to offer you something better. Mortgage brokers negotiate with multiple lenders, so they can save you time with this process. Broker services are usually free, as they are paid for by the banks once the mortgage is secured, but make sure you check this before you begin working together. As a registered or authorised financial adviser, a broker can provide you with specific financial advice for your situation including the best way to structure your mortgage repayments. Choosing the right home loan and repaying it as quickly as possible can save you a sizeable amount in the long run.
Tip: Negotiate rates, only borrow what you need, don’t overcommit, and make repayments as high as is advisably possible. Interest rates will change over time, so if you have a smaller total loan, you will be at less risk of being impacted by these changes.
A residential property lawyer will provide you with up-to-date legal advice about your home purchase. They will review all the necessary documentation, including the sale and purchase agreement (the contract), the Council’s Land Information Memorandum (LIM), the property title, and your mortgage documentation.
Speak with your lawyer before you place an offer on a property, as they are best placed to advise you on the related documentation. If you are eligible to use KiwiSaver or First Home Grants, your lawyer can assist you with these and ensure these are transferred to their trust account in a timely manner.
Tip: If you are purchasing a new build home off the plan, ensure you select a lawyer who is familiar with conveyancing.
When you sign up for a mortgage, your lender or bank will require you to have home insurance cover. The sum insured will need to cover the home and other related structures, such as decks, fences, retaining walls, and your driveway, should they need to be repaired or replaced. What is covered under your home insurance policy will vary from provider to provider. Do your research and shop around to find the right home insurance provider for you.
Tip: you may also want to get contents insurance at the same time, as some insurers offer discounts for customers who have multiple policies with them.
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Universal Homes is not a financial adviser. The material published in this document is of general nature only, and has been provided as a general information service by Universal Homes solely for information purposes for use by prospective property purchasers and/or investors. This document is not intended, nor capable of being construed as, financial, legal or investment advice or advice on any specific problem or situation. Because the information is general in nature, it has been prepared without taking into account any person’s individual objectives, financial situation or particular needs and may not be relevant to individual circumstances. Before purchasing a property or making any investment, borrowing, insurance or financial planning decisions, you should consult a professional adviser and seek your own investment, accounting, financial, legal, tax and other professional advice. Professional advisers can help vou decide whether your decision is appropriate for you.
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