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The house buying process – and how to protect your interests!

To get a better outcome when applying for a mortgage there are some inside tips you need to be aware of and that will ensure a smoother, perhaps less stressful approach to securing a mortgage.

HOT TIP : These are relevant if you are a first home buyer, about to re-finance or even purchasing a 2nd or subsequent property

  1. Get preapproval by contacting a mortgage adviser before beginning to look at property. This will ensure you are looking in the correct price bracket and do not waste your time from the outset. It can be stressful finding your dream home only to discover that the bank can’t - or won’t - provide the funds.

  2. Use a mortgage adviser – we have a wide range of lending options. If your own bank cannot help then we have a number of other banks and lending institutions we can approach on your behalf. NOTE: We will always submit your application to your existing bank unless you specifically advise you do not want to borrow from them.

  3. Going direct to your existing bank can back fire! Don’t worry, we can apply to them on your behalf (at no cost) and we will negotiate the best terms and conditions for you. Because we know what the market is offering daily we have a stronger negotiating opportunity.

  4. Remember Finance dates – these should be at least 10 working days from the date of acceptance of your offer by the vendor and they start from the day on which the contract is dated. The reason for the time period can be many and varied and include the need for a registered valuation, builders report, acknowledgement from the bank that the property is acceptable security for their lending and for other reasons.

    HOT TIP : If this is a struggle in your busy lifestyle – again use a mortgage adviser – this is where our knowledge and experience is available at no cost to you! If unsure call us.

  5. Save your cash until you have to use it. Deposits are only payable upon the contract being declared unconditional. When negotiating a purchase there is no legal requirement that a 10% deposit should be paid. You specify the amount of deposit you are either able to pay or want to pay. Accessing KIWISAVER REMINDER: Keep in mind that KiwiSaver™ funds are not available until the date of settlement and are paid direct to the clients Lawyers Trust account by the KiwiSaver™ provider. If all of the deposit is coming from KiwiSaver™ funds, clients may be able to obtain a temporary overdraft facility however that will be limited to $10,000 - $15,000, dependent on the lender, as the temporary overdraft is unsecured in these cases.

  6. Settlement dates: Where the withdrawal of KiwiSaver™ funds for a first home purchase is applicable you have to consider the following: If preapproval of available KiwiSaver™ funds for withdrawal has been obtained then the minimum time frame to receive the funds from the Kiwisaver provider is generally 2 to 3 weeks. If preapproval has not been obtained the funds may not be available for 4 to 5 weeks. Where a Housing NZ Grant is applicable the following needs to be considered – where applicants qualify for a Housing NZ Grant and preapproval of the Grant has already been obtained from Housing NZ the availability of those funds is generally 4 to 5 weeks. Where preapproval has not been obtained then at least 6 – 7 weeks needs to be allowed before settlement date to ensure those funds will be received by the lawyer in time for settlement. If not the Grant funds will not be provided. Settlement dates therefore need to be discussed with us prior to signing a contract to ensure your Kiwisaver provider and/or Housing NZ (where applicable) have sufficient time to advance the funds to meet the scheduled settlement date timeframe.

    If you are a little concerned or have a question – this is where your mortgage adviser comes into play again - we work alongside you guiding you through the process – so please contact us.

  7. You will more than likely be caught up in the exciting prospect of owning this home and therefore may well overlook a crucial aspect of the Agreement, so get your Lawyer to sight a copy of the Agreement before you sign it. You can email that to your Lawyer, or ask your realty agent to do so. The agreement needs to include clauses to protect the purchaser’s interest. For example – if a valuation is required it should be subject to the valuation being not less than the purchase price – the need to include a clause for a builders report (where applicable) – check finance dates and settlement dates. Your Lawyer will make sense of the legal jargon for you and clarify any issues. Remember a realty agent is generally acting in the vendors interest and will draw conditions up pertinent to the vendor only. You simply need someone on your side of the agreement.

  8. Where buying in a Trust or Company name – make sure this is all organised beforehand – lenders need to know and require a copy of the Trust Deeds (for Trusts) or Certificate of Incorporation (for companies) along with personal details of the Trustees, Shareholders and Directors.

  9. And don’t overlook the fact we will require a copy of the Sale & Purchase Agreement, so ensure either you or the realty agent email us a signed and dated copy. Often this gets forgotten or overlooked.

Next Edition – Going Unconditional After the Due Diligence. Looking behind the ‘Recent Makeover’ to ensure there are no hidden surprises – what you can and should do when buying a property.

Call the team who can help!

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Our advice comes supported by many years in the mortgage and insurance industries. So contact us today!

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