Banks and non-bank lenders have very specific and varying policies giving a greater opportunity for both 1st home buyers and homeowners wanting to build and or add to their residential investment portfolio.
As a first home buyer when considering your home loan and looking for the right home loan, knowing what your options are and what government grants and entitlements you may be eligible for in your best interest. With interest rates falling and property becoming more affordable, first home buyers are in the best buying position they have ever been in.
The rule of thumb is a 20% deposit is required to secure a home loan, this has in many cases meant that many first home buyer were unable to enter the property market. With recent changes and flexibility in bank lending policies several alternate options other than having the full 20% deposit in the bank is now available to assist first home buyers.
Your deposit can be sourced from:
- Personal savings
- Monetary Gift
- Equity or guarantees from family members or parents
- Kiwisaver First Home Grant
Fees and charges for first home loans
Buying your first home will incur fess and additional costs including but not limited to bank/lender fees. As a first home buyer you may incur a LEM fee in the event you do not have the minimum 20% deposit required by the bank/lender.
For more information on expected fees and costs contact us.
Home Loan Types
Maximum Term 30 years
Most of your repayments in the early stages of your loan pay off the interest while most of your repayments in later stages of your loan pay off the principal (the original amount borrowed).
Term 1 – 2 years
You pay the interest-only part of your home loan the payments are lower. This can make it easier on your budget. It is quite common to take an interest-only loan for a year or two and then switch to a table loan after that.
This is similar to an overdraft facility.
All your income and expenses are paid out of this loan account. Interest saving. Lump sum payments possible and you can re-draw any money up to your pre-approved limit. This is risky if you are not very disciplined with your spending.
Like a revolving credit with the added advantage of your balance reducing over time.
You have access to redraw any extra repayments you have made – without penalty. Your home loan reduces over time, and with the extra repayments you will pay less interest. Over time this is also saving you on interest.
Term 6 months – 5 years
The benefit is that you can budget for your home loan payments as they are fixed and provides certainty for that period. Your repayments are not affected by the interest rates over the fixed period. Do keep in mind that if you are on a fixed rate and choose to repay your loan while you are still in your fixed rate period, there may be penalties charged to you by the lender.
Floating rates is when your loan moves with the current interest rate market. Your repayments will go up and down in line with the current interest rates. With a floating rate home loan, you have flexibility of paying more or even paying off your home loan without any penalties being incurred.
We can help
First home Loan & KiwiSaver Grant
KiwiSaver is a voluntary work-based savings scheme designed to help you save for your retirement. For many this may be quite some time away. An advantage of contributing to KiwiSaver is the possibility of utilizing the first home deposit subsidy which, after three years of saving, provides a first home deposit subsidy of $1,000 per year, up to a maximum of $5,000.
As a first home buyer you will want to think about the following:
- What assistance is available to you as a first home buyer?
- What mortgage options are available for first home buyers?
- How much do you have for a deposit?
- How have I sourced my deposit?
- What are the expected fees and costs to buy a property?
- Where do you want to buy?
- Having a good mortgage adviser, call Elaine on 0212739211 to assist you with your home loan decisions.
- You may also require an, accountant, financial planner and solicitor as a good mortgage adviser, referrals can be recommended if you do not already have an accountant, financial planner and solicitor.
When life events, interest rates or your personal circumstance change one of the first things that we think of is our mortgage and the cost or affordability of our mortgage.
There are various lenders to choose from, both banks and non-bank lenders, and they are all wanting your business, so it does pay to talk to Elaine our mortgage adviser.
When you refinance your existing mortgage what you are doing is getting finance to pay off your current loan and replacing your loan with a new one. There is a cost to refinance, so it is worth looking into the long-term benefits of refinancing and do they out weight the cost.
There are few reasons why you would do this but, there are times when this may not be in your best interest, for example if you are on a fixed term rate. I would recommend you speak to Elaine at Allsure Financial Solutions to find the right solution for your refinance needs.
Some reasons why you may consider refinancing:
Lower Interest Rates
To negotiate lower interest rates is one reason why you would review and refinance your mortgage. By lowering your interest rate, you may be able to save money by paying less on your mortgage or better yet maintain the same mortgage repayments while reducing your interest rate will have your paying your mortgage off quicker.
Reduce Mortgage Term
When refinancing you may have the opportunity to reduce the term of your mortgage without much change to your monthly repayments. This means you may become mortgage free earlier than you initially thought.
Allsure Financial Solutions offers you an opportunity to review your current mortgage providing you with options to make the most of your property purchase.
Residential Property Investments Loans
It sounds like an easy way to build up your personal wealth but, good investment properties can be hard to come by.
To find the right investment property you will have to spend a fair amount of time viewing several properties before making an offer on the one that ticks all the boxes.
There are a few factors to consider such as:
- Residential Property
- Commercial Property
- The vacancy rate in the area, is it high or low? Lower the better
- Is the property in an area of growth, near schools, shopping amenities, medical centers this all adds up to the capital gains and rent potential on the investment property?
- The condition of the property, will you have to spend extra to make a good rental return.