With many people eager to take advantage of low interest rates, first-home buyers are flooding to mortgage brokers. However even with banks giving more leeway to buyers, not all applications are created equally. Below are some key points that your broker wishes you knew before buying your first home in New Zealand.
Avoiding short term debt
Being in the industry for many years, a lot of mortgage brokers have identified short term debt being a big factor that affects people buying their first home. Many people take out short term debt without any idea what it means for them in the future until it becomes a problem when they try to buy a house.
Newer generations have short term debt more accessible to them and even with a good income; it can become a problem when you are trying to apply.
Expect your spending habits to be scrutinised
A lot of the time people have no idea what they are spending on a weekly or monthly basis. Mortgage brokers will ask you what your budget is and not knowing can make the whole process a lot harder. People who do not have a budget set up will typically try to borrow more than they can manage.
If you have a solid idea of your income plus your budget, you and your broker will then have reasonable expectations of what you will be able to borrow.
Understand what you earn
It may sound silly, but it is important that you understand how much you earn each pay period. This point kind of ties in with the last as if you have a budget in place you and your broker will understand how much money you are putting towards your housing costs each period and work out a home loan that will best suit you.
