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looking for a mortgage adviser in porirua? look no further!
If you'd rather pass the hassle of obtaining finance onto someone else then contact Brian today and let him take on the lenders for you. As Brian has access to numerous lenders you won't just have to settle for what your current bank offers. By shopping around Brian can ensure you get the best deal available.
football related. As age grade convenor at Western Suburbs Football Club he is often training his academy team, or helping out as a committee member.
Using a guarantor can be a great solution if you are struggling to meet a lenders deposit requirements - but it can be a bit complex too. Brian, The Wellington Mortgage Broker, looks into the details for you.
As you can probably guess, each bank has a slightly different take on it, so your first point of action should be to contact us initially and let us know your plans. You can contact us here.
So how does a guarantee work?
Well, for those who can't quite manage say a 20% deposit banks may be willing to lend money if there is a little outside assistance (i.e. the guarantor). What normally happens is the bank (or lender) will secure a mortgage over your guarantors property in addition to the property you are purchasing.
The guarantee is normally limited to 20% (plus interest and charges in the event of default).
The banks put this extra security in place to mitigate any extra risks they perceive in lending to you. Banks aren't in the business of selling properties at mortgagee sales - but if something goes wrong they want to make sure they are well and truly covered!
It is normal for banks to require that you (the purchaser) can service the entire debt, but some may require that the guarantor prove they can service a portion of it too (20%). They may also require the guarantor to become a co-borrower of part of the debt.
Having a guarantor in place is fine for a while, but ideally you would want to have the guarantee released as soon as possible. For that reason it makes sense to have this set up for a relatively short period (say 2-5 years), after which you can refinance and have the guarantee released. During this period you (the purchaser) would reduce the debt sufficiently so the guarantee is no longer required, allowing the guarantee to be released.
Usually the purchaser(s) needs to prove they can service the entire debt. Some banks require the guarantor to prove they could service some of the loan (20%) and/or be a co-borrower of some of the debt.
For this reason the lender will require some financial information from the guarantor to prove they can actually cover the debt should you default. This may be a full application for some banks. Before a guarantor agrees to anything they should seek independent legal advice.
Security from a guarantor doesn't always need to be over a property. If, for example, your parents are happy to act as guarantors and have a large enough term deposit, this could be used instead. This can be a welcome relief for some guarantors as the thought of using their own home as security can be a little daunting...
Before you venture down this path it makes sense to contact us first to discuss. Use our 2min application form and we'll get back to you asap. If you haven't quite managed to save the deposit you'd hoped for yet then check out our info about the Welcome Home Loan and the Homestart Grant as these may ideal for you too.
IF SAVING FOR THAT DEPOSIT 20% DEPOSIT IT JUST TOO HARD WE HAVE A VERY WELCOME SOLUTION...
A First Home Loan allows you to borrow up to 95% of the purchase price of a property, making getting into your new home much easier than expected for those struggling to reach that elusive 20% deposit mark!
So, who is eligible for a First Home Loan?
First Home Loan has the following standard criteria. You will still need to meet the specific lending criteria of the participating lenders too by the way.
To be eligible you must be a New Zealand citizen or a permanent New Zealand resident (holding a 'Permanent Resident Visa').
Maximum Income Limits:
Minimum deposit Requirements:
You do still need to be able to contribute a minimum 5 percent of the purchase price of the house you are wishing to buy. This can be a gift, from KiwiSaver or from savings etc.
Maximum amount you can borrow:
The maximum amount you can borrow with a First Home Loan depends on the region you are looking to buy in. Each region has a maximum house price cap that you must be within. The maximum loan amount available is therefore the house price cap less your 10 percent deposit.
The house price caps are as follows (for existing properties):
The house caps for new properties are as follows:
There are a number of lenders or providers who offer the First Home Loan. Following a discussion we can help find the best, and most appropriate offer for you and your circumstances.
If you are a first home buyer, and have been contributing to Kiwisaver for 3 or more years you may be eligible for a HomeStart Grant of up to $20,000! You can read more about this scheme here.
If you're a little bit unsure about any of the above just let us know anytime using our 'Live Chat' feature (see bottom right of screen) or contact us here. We're here to help!
Brian MacLean looks into tips, ideas and strategies you can use to get ahead financially..