First Home Buyers

We know that buying your first home can be a bit daunting but we can help answer tricky questions about borrowing money and make everything easier for you. Our team at Tony Mounce Mortgages and Insurance (TMMI) comes from a variety of financial and banking backgrounds, and our advisers share an immense wealth of knowledge about lending money, borrowing money, and buying houses. You are in safe hands here at TMMI.

TMMI offers completely independent mortgage advice; we are not tied to any particular bank or lending institution and we enjoy long-standing relationships with a wide range of reputable financial partners to ensure the best lending solution for your specific needs. Our advice is free. We are paid by the banks for bringing them business so there are absolutely no hidden costs to you.

We’re passionate about mortgages and we’d love to show you the ropes from your first discussion with us through to your final mortgage repayment. Get in touch with us when you are ready to chat about your options.

 

 

 

  • The Journey to Home Ownership
    1. Deposit

    As a rule of thumb, try to have 20% of what you will be purchasing for a deposit. If you don’t have this, don’t worry. There might still be options for you.

    2. Give Us a Call

    We’ll get an idea of your finances and the house you want. Next, we can give you an overview of what you will be able to borrow and help you apply for finance so you can start house hunting with confidence.

    3. Pre-approval

    We’ll submit your application and get you pre-approval for your loan. This is an indication of how much you can afford and a purchase price range to work with. Remember, these are conditional so you AND the property you pick will have to fulfil all the bank’s requirements. Let’s keep checking in with each other so things run smoothly.

    4. House Hunt

    Go to open homes. Use our checklist and find yourself a house you love which ticks all the boxes for your life today and in the future.

    5. Due Diligence aka ‘Do Your Homework’!

    Insurance, builders’ reports, council reports, property valuations: we will take you through these and advise you.

    6. Lawyer-up

    Lawyers are absolutely essential when you borrow money and buy a home. Their job is to protect you and handle all the legal and financial paperwork. The quality of service and advice, and level of costs, varies significantly between lawyers so, if in doubt, ask around. We know some good ones!

    7. Take the Plunge – Make Your Offer or Sign Up to Auction

    How you buy depends on the seller’s chosen sales method: auction, for tender, by negotiation, and so on. Whatever the sales method, buying will typically involve negotiating a price and terms of the purchase, deposit amounts, settlement dates and conditions.

    8. Signed and Sealed

    Get your lawyer to check the terms of the final offer and, once you and the vendor are happy, it is time for you both to sign the Agreement for Sale and Purchase of Real Estate (Sale & Purchase Agreement).

    9. Going Unconditional

    Once you have met all the conditions set out within the specified time frame, the Sale & Purchase Agreement then becomes unconditional. This is when we help you put together the best structure for your new home loan. We will help you check the details of your first repayment and make sure you are set up for your consequent payments to avoid any nasty surprises.

    10. Complete your Settlement

    Your lawyer will help you complete all remaining paperwork. This includes signing home loan documents and confirming remaining balances get paid. You’re now officially a home owner and it’s time for MOVING DAY!

    11. Moving Day

    Don’t forget – make sure you’ve budgeted for all costs including power connection fees and pizza – because you’ll have earned it after a long day of moving! We’ll be there with you each step of the way to make sure you have all your paperwork in order, to give you advice and encouragement, and to support you.

  • The Basics: Mortgages 101

    A mortgage is an agreement to lend and borrow money secured by real property. The borrower, that’s the mortgagee, pays the loan back to the lender, known as the mortgagor, in installments over a set period of time called the term. The mortgage secures the mortgagee’s legal obligation to repay the lending institution, typically a bank. Lending money incurs costs and no one lends you money for free. The bank makes a business out of these transactions by charging interest on the amount borrowed.

    Components

    1. Mortgage Approval

    To get a mortgage, you must meet a few requirements. Each lending institution or bank is different and has its own guidelines for lending. The bank will probe your credit history, income, employment situation and asset holdings to see if you are a good prospect.

    The home or land you want to buy will also need to be up to a certain standard.

    2. Mortgage Payments

    Most New Zealand home loans have a mortgage term of between 15 and 30 years. The repayments are divided into equal monthly amounts over the term, called a fixed rate. A portion of the monthly amount goes towards paying back the principal, the amount you borrowed, while the difference pays the interest charged by the lender. Your monthly payments stay the same amount for the whole term but, with each payment, the interest portion decreases and the balance paid off the principal increases. This process is called ‘amortisation’.

    The bigger deposit and instalments you pay, the less interest you’ll end up paying the bank over time. Don’t leave yourself short of funds to cover living expenses and costs of owning a property though. Remember, putting any unexpected windfall that comes your way into paying off your mortgage can be your most effective way of saving.

    3. Mortgage Plans

    There are lots of mortgage plans on offer at various banks and lending institutions. Other types of mortgage structures available include options for paying the interest portion only off your loan for a period before you start paying off the principal. You need to find the plan that suits you best and not get talked into the one that favours the bank. As an independent home loan specialist, TMMI can give you advice based on your unique financial situation, assess your eligibility and prepare your application to perfectly meet the requirements of the bank that we believe offers the best plan for you.

    4. Closing Costs/Fees

    Aside from the bank charging interest over time, there will be other expenses known as ‘closing costs’ or ‘settlement costs’ incurred to complete a real estate transaction.

    You must take these into account and have funds at hand to pay them in full on settlement day or include these additional costs in the amount you borrow.

    Getting advice from a mortgage adviser is not an additional cost on top of the sale price of the property. TMMI offers free mortgage advice to residential home buyers.

    5. Mortgage Rates

    These are the interest rates the banks charge you for borrowing money. They are tied to the Official Cash Rate (OCR) and can change often, even several times in one day. However, your mortgage plan will typically tie your payments to a rate that is fixed for a few months or years, making it easy for you to budget. Some plans will offer the option of having a portion of your payments on a floating rate that simply means the repayments on that portion could rise or fall if the lender changes their rate. This is an advantage only if rates are low or dropping. Lower interest rates are good! As of November 2017, rates in New Zealand are currently hovering around 5% and slightly lower but, in the past, they have reached as high as 19%, which is exceptionally high. Right now is an excellent time to get your first home mortgage since the interest rates are the lowest they have been for many years.

    6. Getting A Deposit Together

    To buy a home these days, it is recommended you have at least 20% of the purchase price saved up – but we might still be able to help you even if you don’t. If the home you want is for sale at $350,000 that means you should have a whopping $70,000 at hand for a deposit before the bank will come to the party with the remaining $280,000 plus settlement costs. As a first home buyer, you can access your Kiwisaver account to pay the deposit and TMMI can show you how to apply.

  • Checklist for First Home Buyers

    Here’s a handy list of things to look for when assessing a property. If items on the list do not meet your standards, you will have to either fix them yourself or pay someone else to fix them. Factor the cost of essential repairs into the price of a property.

    Internal Areas

    General
    • Water stains or mould indicating leaks or floods
    • Smells of pets or dampness
    • Foot traffic flow between rooms and open plan zones, and indoor-outdoor
    • Check for natural light by turning lights off. Turn lights on to check level of artificial lighting and confirm that lights are working
    • Electrical outlets, phone jacks: check quantity and location
    • Noise levels from proximity to neighbours and road, nearby factories and railway lines
    • Type of heating and placement of vents; functioning fireplaces and chimneys
    • Insulation and double glazing
    • Consider testing for asbestos and P-lab contamination
    Kitchen
    • Storage and bench space for appliances and utensils
    • Extraction fan or range hood. Check functionality, age and noise level
    • Check age and condition of appliances and whether they are listed as chattels
    • Electrical outlets. Check quantity and location
    Bathrooms
    • Check age of fittings
    • Turn shower on; run taps and flush lavatory to check water pressure
    • Ventilation through windows and extraction fan
    • Check for water damage, cracked tiles and peeling paint
    • Storage sufficient for toiletries, towels, medicines and cleaning products
    • Working heated towel rails and mirrors
    Laundry
    • Existing fittings to connect washing machine
    • Air venting system for the dryer
    • Storage space for vacuum cleaner, broom, clothes basket, bed linen and clothes rack
    Bedrooms
    • Sufficient bedrooms for a growing family and guests
    • Measure for furniture fit and storage space
    • Check wardrobe space
    • Electrical outlets, phone jacks: check quantity and location
    Living and Dining
    • Electrical outlets, phone jacks, data points: check quantity and location
    • Check space for open plan living, and flow between kitchen and dining areas
    • Play zone or room for kids
    • Storage for ornaments, books, sound system and television
    • Zone or separate room for computer or home office
    Basement
    • Visible plumbing: check age, material and condition
    • Material and condition of foundations and piles
    Garage
    • Check for fit of vehicles, bicycles, recycling bins, storage of sports equipment and bulky items
    • Hobby or workshop area
    • Space for a drier if no room in laundry
    • Internal secure access to house

     

    External Areas

    General
    • Locate aerial, Sky Dish and broadband cabling entry
    • Locate electrical earthing wire
    • Locate water main and outside taps
    • Consider where rubbish and recycling will be stored and how easy it is to remove it from the property
    The Roof
    • Material and condition of roofing cladding
    • Skylights must be watertight
    • Check whether chimneys are an earthquake risk and need strengthening
    • Downpipes and spouting should be in good condition
      Tip: Visit the house on a rainy day and watch the guttering and roof in action to see if the section drains quickly
    Walls
    • Material and condition of exterior cladding; check for cracks
    • Material and condition of window joinery
    Decks
    • Material and condition of decks and balustrades, and signs of water damage in rooms below decks
    Garden
    • Look for maintenance of garden, pathways, gates and fences
    • Consider security of pets and small children
    • Ask about any protected trees
    • Look for noxious weeds, poisonous plants and toxic rubbish
    • Check local council files for properties on contaminated ground
    • Consider condition of driveway
    Canterbury Properties
    • Find out whether the house was earthquake damaged; whether an EQC or insurer’s claim was lodged; whether repairs are complete and certified; and get a builder’s report.
    • Find out what the Technical Category of the land is. This will affect cost of insurance premiums.
    • Consider taking over the vendor’s insurance policy if the property is currently insured.

     

    Essential Questions

    Ask your agent or the seller these questions. Answers to many of these can also be found on the local authority’s rates notices, on the Land Information Memorandum (LIM) and through Quotable Value New Zealand (QV) online. The agent or vendor should have the LIM, rates and EQC information at hand.

    • Why are they selling?
    • How long has it been on the market?
    • What is the Rateable Value (RV)?
    • How much are the rates?
    • What material is used for insulation, and where?
    • Will the house need rewiring?
    • Has the house had any additions or renovations? Have all permits been signed off?
    • What chattels are staying with the house?
    • When was it built? Note that ‘leaky homes’ were built between 1985-2003. You might need a Weather Tightness Report.
    • What is the Technical Category of the land?
    • Is the house in a Flood Risk Zone? In these areas, all new homes and commercial buildings will be required to have their floor levels at a height that protects them from flooding events.