Traps to avoid - A guide for home buyers
Let’s be honest, buying a home is not something you do on a whim (well for most of us!) and it takes time and preparation. Applying for a mortgage may seem like a daunting process but thankfully it’s a journey that you don’t need to complete on your own. This is what we’re here for.
We’ve been helping people to secure finance for over 40 years, so we’ve seen all sorts of scenarios play out. We also know the traps to avoid and how to make the process smoother.
Here are our tips for traps to avoid when buying a property.
Not getting pre-approved before you go house hunting
We’ve seen this before – people find their dream home and want to make an offer, only to find that they can’t borrow the asking amount or someone with pre-approval beats them to it. Before you get your heart set on a property, talk to us.
Seeking pre-approval is an essential first step for several reasons. Firstly, by going through the pre-approval process we can identify a price range that you can realistically afford. That way when you start looking at properties, you know what your budget is.
It also means that when you find the ideal property, you are ready to make an offer and vendors and agents will view you as a serious buyer.Not having a deposit
Having funds to put down as a deposit and a proven savings history is a must. Lenders want to see that you can manage your money and that you can afford the mortgage repayments. Also – the bigger the deposit, the less you need to borrow.
To give you an idea of how much you need to save – to purchase a new build property you need a minimum of 10% of the purchase price. For an existing home, its 10 – 20%.
If you fall short of your deposit goal, there are options that we can explore with you. This includes a family member gifting you part of the deposit or acting as a guarantor, or the Kainga Ora first home loan. We can talk you through your options that best suit your situation and how this process works.Not knowing what you’re looking for in a property
Having a clear view of what you want in a home will make the property hunt easier and we’ll know what we’re aiming for with the loan.
Make a ‘wish list’ for your property such as size, location etc. Once you know the boxes a property needs to tick, you can look at current listings and get an understanding of what your wish list will cost you. For some this could be a reality check on their wants vs what they can afford.Not understanding the cost of home ownership
Your pre-purchase research should go beyond the price of a property. You also need to factor in costs such as rates, insurances, and bank fees and professional fees to name a few. These all need to be covered in your budget when applying for pre-approval.
We recommend that you do your research and make a list of all the costs that are associated with property ownership. If you’re not sure where to begin and have questions, we can help you with this.Not getting expert advice
Buying a property is a significant purchase and commitment and you want to make sure you go about it the right way. It can be a complicated process with lots of paperwork and sometimes hoops to jump through and you don’t want to do it alone. You can save yourself stress and headaches by speaking to a mortgage advisor… like us!
Getting expert advice helps you avoid falling into these common traps.
How we can help you with your home loan
Our goal is to make the process as smooth as possible for you. We’ll guide you along every step of the way and ensure the loan you go with is the perfect fit for what you need.
Learn more about getting your home loan with us
If you have any questions or would like to get the pre-approval process started, book an appointment with us.
