|For most New Zealanders, the goal of owning a home is still achievable. We enjoy helping many to achieve this objective. |
With current interest rates, many existing home owners are saving $,000s by replacing the current mortgage with a new mortgage at lower rates, and flexibility. Refinancing is a simple process and can be obtained from traditional lenders such as Banks, or the newer lower cost non-bank lenders. Contact us.
Today, there are many options available to the home buyer, and these need to be fitted to your needs and circumstances. We can assist in this process in selecting and designing the appropriate mortgage for your current and future needs.
You need to be able to demonstrate that you earn sufficient income to service the mortgage repayments and continue to cover other living costs. Most lenders will consider the use of up to 40% of your gross income for mortgage servicing. This places an upper limit on the sum that will be lent.
Now up to 80% of purchase price or valuation (whichever is the lower) on owner occupied property. This means you will need a deposit. Some lenders require less.
Note your deposit is your initial equity in the home. As your repay the mortgage and/ or the market value of the home changes, so does your equity. Some use the equity in one property to finance another. If you wish to do this remember that the lenders will require security over both properties.
These can be mixed with say a fixed% and a floating % say 80/20. While fixed rates give certainty, early repayments can incur penalties from some lenders. For this reason it is useful to include a floating % in your mortgage. Combined with the flexibility to make extra repayments or direct crediting of salary/wages, the use of the floating rate can lead to a substantially earlier repayment of the mortgage.
Rates are constantly changing to reflect treasury and government policies and lenders borrowing costs and margins. Contact us here for samples of the current rates. Please remember that any rates quoted may change prior to the mortgage being approved.
Most lenders will also require that the loan be covered with an appropriate mortgage insurance policy. For further details see Mortgage Insurance below.
Our Mortgage Insurance policies, provide cover for the amount outstanding in a mortgage as it reduces over the term. Medical examinations are normally not required. It is designed for single people or families covering both partners and reducing at a similar rate as the mortgage. Can be paid as a lump sum or annually or monthly. We strongly recommend the annual or monthly option as the average period of a mortgage is only 7 year's, and rates have been reducing in recent years as we live longer. It can easily be stopped at no cost if the mortgage is repaid early. It can be adjusted easily to reflect any changes in a mortgage.
Some banks like to add it to your mortgage as a lump sum, charge interest on it and then retain a large administrative charge if you repay early. It is far cheaper in the short and long run to pay as you go.
Costello Financial Services