We’re talking, of course, about mortgage brokers. A mortgage broker essentially acts as a middleman between you and home loan providers, and really can improve the approval process from beginning to end. How?

Better rates: Mortgage brokers typically have access to a bunch of different products across a range of lenders, enabling them (and you!) to quickly compare rates and negotiate with banks to find the home loan that best suits your circumstances.

Industry pros: Do you know what an acceleration clause is? What happens when your guarantor goes missing? Any idea what constitutes a ‘reasonable’ lending fee? Mortgage brokers deal with home loans day in, day out, and can help you decipher contract small print to ensure you’re not getting ripped off.

Impartial advice: Unlike lenders, brokers have relatively little interest in which mortgage you ultimately choose. As such, they’re a pretty good source of impartial information and advice.

Strong relationships with banks: The chances of your mortgage application being approved largely comes down to whether a lender thinks it can trust you. Good brokers have strong relationships with many different banks, which can speed up the application process and boost your chances of securing a home loan.

Free: The icing on the cake is that using a mortgage broker is completely free! They get paid by the lender, so you don’t have to worry about yet another cost to buying a house.

While there are many benefits to using a broker, it’s important to keep your options open. In addition to talking to a broker, be sure to check our New Zealand mortgage rate comparison tool for up-to- date insight into the best home loan rates in Aotearoa.

The post Why use a mortgage broker? appeared first on PocketWise.

Tip 1: Get a Job, Stay in a Job

When banks lend you money to buy a property, they inevitably want to make sure you’ll be able to repay your loan. If you don’t have a consistent job, banks can’t be sure that you will be earning a consistent wage or salary to be able to meet your repayments. When you have consistent income, it not only makes it easier to assess how much you can afford, but also helps convince the bank that you will be able to make the repayments when they fall due. It also shows banks that you have the temperament and maturity to commit to something in the long term – which is exactly what your mortgage will be.

Tip 2: Reduce Debt

Another big factor which banks will consider is how much debt you owe to your creditors. You don’t necessarily need to have zero debt, but the less you have, the better. If you have credit card debt, or a loan on a car, it’s a good idea to try and reduce these as much as possible before applying for your mortgage. Not only will it improve your chances of getting approved, but might also increase the loan amount you can borrow. If you want a quick way to assess your finances and see where you can improve, take your free financial checkup now and start saving money today.

Continued below…

Tip 3: Know and Improve Your Credit Score

Reducing debt will also have a positive impact on your credit score. According to creditsimple.co.nz, “A credit score is a number between 0 and 1,000 that indicates how credit-worthy you are, and how likely you are to pay your bills on time. Most credit scores are between 300 and 850. The higher the score, the better your credit rating is.” Banks keep a close eye on your credit score when deciding if they should lend you money – it’s a good idea to keep track of your credit score, and try improving it where you can. Credit Simple is a great, free website that can tell you your credit score and how to improve it.

Tip 4: Save, Save, Save

LVR (Loan to Value ratio) restrictions imposed by the Reserve Bank mean that you generally need a 20 percent deposit for the the value of the house you want to buy. In other words, for a $500,000 house (this is still realistic in places outside of Auckland!), you would need a deposit of $100,000. Let’s be real – that is a lot of money, and saving that amount won’t happen overnight. But the earlier you understand these factors, the earlier you should start saving, and the better prepared you will be when it comes to actually getting a mortgage and buying your first home.

Hey, we never promised getting a mortgage was easy. The tips above won’t approve your mortgage overnight, but you’re better off acting on them now rather than later. With the right knowledge, a bit of preparation, and the right mindset, you can greatly improve your chances of getting your mortgage approved.

If you’d like to compare mortgage rates to see what you might afford, head over to our mortgage comparison now. If you’re ready to take the next step, as well as get the best mortgage deal for your first home purchase, submit a loan enquiry with a PocketWise partnered broker – absolutely free.

Cheers,

The PocketWise Team

www.pocketwise.co.nz

The post 4 Tips to Get Your First Mortgage Loan Approved appeared first on PocketWise.

HomeStart grant

If you have been an active contributor to KiwiSaver for at least three years, you may be eligible for a HomeStart grant. Eligible members can get up to $5,000 for the purchase of an existing/older home (up to $10,000 for eligible couples), or $10,000 for the purchase or building of a brand new house (up to $20,000 for eligible couples).

Eligibility criteria (Find out full criteria on the HomeStart website):

1. The grant is for your first home
2. You have been an active KiwiSaver contributor for at least three years
3. Your income is below the income caps:
   • $85,000 for individuals (increased from $80,000), or
   • $130,000 (increased from $120,000) for a couple
4. House price falls below the price caps:
   • Auckland: $600,000 for existing house, $650,000 for new house.
   • Wellington, Christchurch, Hamilton, Tauranga, Queenstown and Nelson-Tasman: $500,000 for existing house, $550,000 for new house.
   • Rest of NZ: $400,000 for existing house, $450,000 for new house.

As long as you live in that house for a minimum of 6 months from settlement date, the grant does not need to paid back = FREE MONEY! Don’t let your contributions go to waste – If you are a first home buyer, have been a KiwiSaver contributor for at least three years, and need a little boost for your house deposit, enquire about the HomeStart grant from Housing New Zealand! Note that the application can take up to four weeks before the grant can be paid out to you, so apply early, or even get pre-approved.

First-home withdrawal

If you have been contributing to KiwiSaver for a few years (minimum three years), you may have built up a handy balance which can be withdrawn to help with your first home deposit.

“You may be able to withdraw some of your KiwiSaver savings (provided you leave a minimum balance of $1,000 in your account) to put towards purchasing your first home.”

This means, if you have a KiwiSaver balance of $10,000, you may be eligible to withdraw up to $9000 (leave a minimum $1000 balance in the account) to help with your home purchase.

With increased lending restrictions by the banks, it is getting harder for first home buyers to fork up the cash to meet the required deposits. If you have been an active KiwiSaver contributor, contact Housing New Zealand or KiwiSaver to find out more about the HomeStart grant or KiwiSaver withdrawals. If you’d like to learn more about this, as well as get the best mortgage deal for your first home purchase, submit a loan enquiry with a PocketWise partnered broker – absolutely free.

The post Using your KiwiSaver membership to help buy your first home appeared first on PocketWise.