Every journey begins with the first steps and the result you get has a lot to do with the direction of those steps.
You may be able to buy your first home right now, or in many cases there may be some things that need to be done before you are ready – or at least before you are able to get the best home loan.
What Banks Look For From First Home Buyers
Banks typically look at a few key things;
Deposit – the general rule is the banks want you to have a 20% deposit; however as mortgage brokers we can source mortgages for people who have less than this from both banks and non-bank lenders.
CLICK HERE to find out more about the deposits.
Income – any lender needs to be comfortable that you can afford the mortgage repayments. They do this by (1) looking at your income and assessing how stable it is (in their eyes), (2) reviewing your declared expenses compared to the banks assumptions and then (3) calculating the mortgage repayments at a rate higher than the current rate.
Credit History – in New Zealand most banks and non-bank lenders will rely on your Veda credit report which shows a credit score for you. The more enquiries and changes of address will lower your score as will any payment defaults and if your score is too low then many banks will not offer finance which means you will need to go to a non-standard mortgage with one of the banks or non-bank lenders.
Bank Account Conduct – before a lender approves your loan they will review your last 3-months transnational accounts.
Statement of Position – the bank will look at what assets and liabilities you have. High levels of short-term debt will have a negative impact in two ways – (1) the banks need to factor in the repayments that you pay and (2) the banks do not like too many separate loans.
As mortgage brokers we look at the same things that the banks do before any application is sent to the bank, and therefore we can address anything that could be problematic.
Your First Steps
The first steps are to;
- Establish you current financial situation
- Make any necessary changes
- Prepare and submit a finance application to the bank or non-bank lender for a pre-approval
- Then start looking for a suitable new home
Contact us today and we can discuss how we can help make the process easier for you.