Everything you need to know as a first home buyer.
At the lending Department our process is simple, easy to understand and most importantly all about you. We are proud professionals and experts in lending.
When assessing a loan application for first home buyers, lenders will consider income, your credit history and loan to value ratio.
How we will look at your income
How much you earn and how long you’ve been in your present job are the two major questions. There may be complications in measuring your income if part of your earnings are from overtime, bonus or commission. If you’re self-employed, we’ll need your financial accounts.
You may be able to include earnings boarder income from flatmates, family support payments etc. – we’ll help you through that process. The mortgage calculator will give you an idea of your borrowing capacity, but we’ll need to put together a full loan application to gauge that accurately.
How much you earn and how long you’ve been in your present job are the two major questions. There may be complications in measuring your income if part of your earnings are from overtime, bonus or commission. If you’re self-employed, we’ll need your financial accounts.
You may be able to include earnings boarder income from flatmates, family support payments etc. – we’ll help you through that process. The mortgage calculator will give you an idea of your borrowing capacity, but we’ll need to put together a full loan application to gauge that accurately.
Your credit history
When assessing a loan all lenders will run a Credit Check to verify your credit history. This will show previously unpaid loans and bills that have been sent to baycorp. A credit check will also show if you have been declared bankrupt in the past.
We can run a Credit Check for you before your loan application is sent to a lender, that way we can ensure there are no surprises. For more information, please don’t hesitate to contact us.
Required Loan to Value Ratio
The LVR stands for Loan to Value Ratio, which simply means loan amount divided by purchase price – and represents the maximum percentage of the purchase price you are able to borrow.
In 2013 the Reserve Bank acted to restrict bank lending to LVR of 80%. That meant that purchasers would need to have a deposit of 20%.
This restriction has recently been relaxed in the case of new constructions, and a maximum LVR of 90% applies to new houses. We do have lenders who will look at 90% LVR loans even for existing houses.
As well as genuine savings your deposit funds can come from alternative sources, such as:
Kiwisaver
If you have been contributing to KiwiSaver for at least 3 years, you are able to withdraw the bulk of your fund to assist with a first home purchase. We’ll help you through this process.
Help from family
If you simply do not meet the banks’ lending criteria, we may be able to arrange the loan by using assistance from a family member – perhaps by using equity in another property, or by way of guarantee.
Our Process
Initial Conversation
The initial conversation is where we get to know you. Who you are, what your goals are and how we can help. By the end of this meeting you should have a clear idea of what our plan is and how we are able to assist you.
Information Gathering
This is where we flesh out the details from our first conversation, you will complete a Fact Find and Statement of Position and provide all the supporting documentation necessary, we will compile this into a clear loan application.
Approach Lenders
We then submit this application to the bank on your behalf and work through any issues until we have an approval. If there are any conditions on this approval, we will work with you to have them satisfied so that you can purchase unconditionally.
Structure and Rates
This is where we negotiate interest rates on your behalf, then assist you in deciding how you will structure your lending. The correct loan structure can save you thousands of dollars over the life of the loan, so we take this meeting very seriously.
Ongoing Service
Our commitment to you does not end when your loan is settled. We will be here to look after your financial needs for the rest of your life. We will assist you when your interest rates need to be re-fixed, or if you have a change of circumstance.
