subject: Christchurch Home Loans [print this page] This article will give an overview of what's involved in getting a home loan in Christchurch, and will give you some tips on how to avoid getting ripped off!
Buying a house is one of the biggest decisions you'll ever make. Getting the right mortgage to pay for it is complicated and has huge long-term effects on your financial future, so you'll want to be sure you know what you're doing before you begin looking for a home loan. Here are some answers to frequently asked questions about finding a home loan in Christchurch.
Q I'd like to be able to buy my own home. What do I need to do to qualify for a mortgage?
A Most lenders require a deposit of at least 5-20% of the cost of the house and proof of income to ensure that you'll be able to make regular payments and meet the agreed terms of your loan.
Q How much can I borrow?
A Lenders will be interested in your current income and expenses, and how much they think you can afford to pay on top of your existing financial commitments.
Some lenders will require that your fixed payments, which would include your mortgage and other ongoing loan or hire-purchase payments, comprise no more than 30-40% of your gross income, but this will vary between lenders.
They will consider the combined income of your household, and will also take account of additional expenses if you have children.
In any case, you can expect to provide detailed information about your incomings and outgoings for each month as part of the approval process.
Q I'm self-employed. Is that a problem?
A If you've been in business for a while, you will need to provide your accounts from the last 1-3 years to document your income.
If you're new in business or have a poor credit rating, you may need to apply for a 'low doc' (low documentation) or 'no doc' loan. These types of loans will generally have higher interest rates and fees since they are considered a higher risk for the lender. You can generally shift to a standard mortgage after a few years if you've kept up with your regular payments.
Q Is there a way to find out how much I can afford to spend and what my mortgage payments will be?
A Many financial institutions or advisors provide a mortgage or debt repayment calculator, like this one on sorted.org. By calculating how much repayments will be for different sized loans, you can get a clear sense of your price range before you start looking at homes.
For more detailed information on how to get the right loan structure to suit your needs, what to do if you need help in raising a deposit, the single most important thing you can do to keep your costs down, and questions you should ask if you're shopping for a mortgage broker, visit http://ChristchurchHomeLoans.co.nz RIGHT AWAY to download a FREE report that will give you all the information you need to find the right mortgage for you!
