You’re here because you’re looking for advice on mortgages. Whether you’re about to sink your teeth into one because you bought a house, or you are looking at your next home, an investment property, or you are simply at the very beginning of the financial journey, and you’re not sure where to start.
Here’s a great place. Read along through to see some frequently asked questions.
A home is often one of the biggest purchases we’ll ever make in our lifetimes, which means you need to go in armed with the knowledge to feel informed and ready to make a good decision. Being smart with your mortgage can also save you thousands in the long run.
Is advice for mortgages free?
At Money Empire, your first chat with us is free, and it should be! Paying an exorbitant amount of money to even have a sit-down discussion and see where you’re at isn’t fair to you. If you are getting tailored and specialised advice for mortgages, it will ultimately depend on the company or individual you go to and your situation.
What is the best advice for mortgages?
The best advice we could give is to see a professional! A mortgage broker or a financial adviser can help manage this for you, so they can help save you time and effort. It is their job to know the lie of the land and the tricks of the trade to ensure you get the best possible outcome for your situation and future home.
There is no obligation to go with your current or regular bank either, which means if you are feeling the pressure, take a step back.
Be aware of something called a ‘revolving credit’. Think of this as a huge overdraft, which looks great! But, it requires a heap of discipline to make it work for you. If you are about to embark on this part of the mortgage journey, again, we say talk to a professional and make sure this will work for you.
Review your mortgage structure each time it’s due. If you are on a fixed-term loan, we usually recommend being in a fixed-term for no more than a year, which gives you a heap of flexibility to change based on your lifestyle. We would also recommend in this situation you treat it like you would approach your home buying journey again, as going to a mortgage broker or financial adviser can get you the best rates, and help you figure out how to approach the next section of time.
Is it worth paying more on your mortgage?
We vote yes, as long as it’s within your means. Even if you up your repayments at $50 a week, or even $25, you will save thousands of dollars in interest and repayments.
Choosing a lower-cost loan and repaying this quickly can help you save a heap of time, reducing pressure and expenditure in the long run.
What are the things you need to qualify for a mortgage?
To qualify for a mortgage in NZ, you will need the below:
- A deposit
- Stable income and employment stability
- NZ citizenship or residency
- Good credit score
- Good account conduct
What do all of these mean?
You can get a home loan using less than the initially required 20% deposit; however, you will need to chat to your financial adviser or mortgage broker to get a steer on this and whether this is right for you. A good credit score comes from paying back your debts and bills on time, and good account conduct (meaning you don’t slip into overdraft all the time or have unarranged fees charged to your account/s).
Why shouldn’t you pay off your mortgage quickly?
We have seen some blog articles that offer advice on mortgages saying you shouldn’t pay off your mortgage quickly. Much like everything we advise and recommend, financial movements all depend on your personal budget and goals.
Some people can afford to pay off their mortgage quicker, especially if they have a high-interest rate or a big loan! Some people simply can’t. Every single situation is different! We would always say chat to a trusted financial adviser, and stay true to your long-term goals.
Can you get money if you switch banks?
Changing loans or lenders can be a bit of a tricky process, but it could save you some money! Before you change, look at the costs and possible savings in detail. Your mortgage broker or financial adviser can step in and help you decide if this is a possibility for you.
However, there may be some costs. A few possible costs that can occur if you switch lenders:
- An early repayment fee
- A ‘break’ fee (e.g. where you have signed up for a longer fixed-term loan)
- Application fees
- Legal or valuation bills
Lenders and banks will often do the absolute most to get a new client on board, however, get any offer they provide to you in writing before making a decision so that you are watertight.
Hopefully, this series of advice on mortgages can help you decide your next steps. We are financial advisers, and we pride ourselves on being independent and unbiased. If you’re ever unsure, get in touch with us!