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Sarahcular 
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Joined: 01 August 2007
Points: 29
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 Topic: Advise on buying a home
Posted: 25 August 2008 at 1:34pm |
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Hi everyone,
Me and Dh are planning to buy a home as we are currently renting and we prefer to pay this rent money to mortgage. However we have not one clue when it comes to buying a house and setting up a mortgage etc. We don't want to get into some finance company with regrets and we just seem so hesitant in making a decision not knowing where to go and where to look. We both have started working full time recently so unfortunaly we don't have a "proper" deposit to pay.
Any advise would be great!
Edited by Sarahcular
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emz
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Joined: 25 November 2006
Location: Christchurch
Points: 5321
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Posted: 25 August 2008 at 1:39pm |
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Most banks are tightening up on no deposit so you're best to try and save for one. Plus if you have a low equity mortgage you usually get charged a higher interest rate.
Your best bet is to go and see a mortgage broker and see what they say. Not all banks work with them though so ask them about that then go and see the banks that don't to get a comparison. I know BNZ usually don't work with mortgage brokers.
When you buy your house you also need to pay legal costs and they could be a couple of grand, but you can often get a deal with your mortgage where they pay up to $500 legal or something.
Good luck.
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LizzyJ
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Joined: 15 October 2007
Location: Paraparaumu
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Posted: 25 August 2008 at 1:49pm |
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Banks are currently looking at interest cover as well. You need to be able to pay the mortgage 1.5x (interest + Principle) or 2.5x (interest only) after you have paid all your other expenses.
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sadie
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Joined: 23 April 2008
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Posted: 25 August 2008 at 1:51pm |
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Maybe the best first port of call would be to make an appointment with your bank manager just to talk about your finances, and how much you can expect to borrow. Then investigate mortgage brokers as well.
Most good banks will go some way towards matching a fixed interest rate that you have been offered elsewhere, so if you would rather stick with your own bank for everything, then you could give that a go.
We wanted to keep our mortgage at the same place as our bank accounts purely for convenience, so we negotiated the fixed rate to within 0.1% of the lowest offer we had elsewhere. You should also be able to negotiate legal costs to be covered as well.
As Emz said though, you will be in a lot better position if you have a deposit already.
Househunting is the fun part! Write a list of all the elements you really want ie number of bedrooms, off street parking etc etc, and take a checklist with you to all the places you go see. Don't forget hidden things like insulation etc.
Also, always get the LIM report and an inspection done on any property you have an offer accepted on - make it a condition of the offer.
Good luck!
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T_Rex
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Joined: 07 March 2007
Location: PN
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Posted: 25 August 2008 at 2:26pm |
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Some banks have calculators on their website which might be a good place to start just to get a general idea of how much you might be able to borrow. I'm pretty sure National Bank does.
If you don't have a deposit now, but you will in a year or so, you may actually be better to continue paying rent for a bit longer whilst saving for a deposit so you don't have to pay the greater interest rate that goes with the low deposit.
In the meantime, you can go to open homes to get a feel for what is available in your price range. We started open-homing 6 months before we bought. It meant that by the time the right house came along, we recognised it was a good house at a good price, whereas if we'd just started looking at that point, we wouldn't have known that. You'll feel a lot more prepared once you've had a look around. The advantage of moving from a rental to your own house is that you are a cash buyer (ie. you don't have to make an agreement conditional on selling your current house) so you can often buy the house a bit cheaper because of that. Additionally, you can take your time waiting for the right house, and negotiating the right deal, because you don't have a deadline on an existing contract.
Good luck, house hunting is great fun, if a little stressful.
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kebakat
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Joined: 01 January 1900
Location: Palmy North
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Posted: 25 August 2008 at 2:30pm |
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I agree with the others. Go have a chat and just see what is available to you.
I think it might be wise to save up for a year or so and get a deposit together, you will be way better off in the long run with a reduced mortgage. Just put away as much as you can in the highest interest bank account that you can get.
Keeping an eye on housing prices is also a great idea to see whats out there for what you can afford
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Sarahcular
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Joined: 01 August 2007
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Posted: 25 August 2008 at 3:26pm |
oh you guys are great!
i'm afraid to admit that im such an impatient person when it comes to houses. I just can't wait!
I actually wasn't aware of all that I just thought that we could be paying the rent towards a mortgage. It's hard seeing all that money go every week 
It got to the point where I'm breaking it down to how much we are paying per night and per hour... I guess Im over analysing 
But thanks a bunch for the tips, you guys are awesome!
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Roksana
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Joined: 01 January 1900
Location: Manurewa, Auckland
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Posted: 25 August 2008 at 5:04pm |
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Did you try Mike Pero mortgages? they are really good and Free. They can take all your Fin details and do all the ground work for you, as in find a bank that will loan you the money etc etc.
And they will tell you of you can afford a house, if so how much can you afford, so start with that and see how you go, it will give you an idea any ways!
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Febgirl
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Joined: 10 August 2007
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Posted: 25 August 2008 at 5:12pm |
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That's right, in case you don't know (I didn't when we got our mortgage) mortgage brokers don't charge you for their services (they get commissions from lenders once you sign up to a mortage) so no harm in calling one up to make an appointment and take it from there.
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Advise on buying a home
