© Copyright 2024 Tella (New Zealand) Limited. All Rights Reserved. Powered by Tella.
17 minute read
Busting home loan myths
Let's clear up some rumours about getting into your first home.
Andrea Rowlands
21 July 2023
Please Note: This newsletter was originally published on 21st July 2023. While the information presented here may still be valuable, some aspects may be outdated.
There still seem to be a lot of rumours about how hard it is for first home buyers to get into homes and how tough it is to get bank approval. But house prices are down, the banks really want new business and they're doing what they can to help with approvals. So just to bust a few myths, this is what we have seen approved in the last month or so:
Back in NZ - unsure about short time on the job:
We recently helped a young couple in their early twenties settle into their very first home after returning from working in Australia. They were aiming for Kainga Ora's 5% deposit First Home Loan so thought they needed a years worth of job history to make it happen.
Once we tallied up their savings, KiwiSaver contributions, and First Home Grant, we realised they had enough deposit to buy the property without Kainga Ora's help.
And guess what? If you're buying a property without Kainga Ora's assistance, there is no 'time at employment' criteria you need to meet. You just need to have an employment contract and not be in a probation period.
We got them approved with a main bank.
From our very first conversation to applying and finally settling, it took us just 6 weeks to see them stepping into their brand new home.
No credit history? No problem!
One of our youngest clients recently purchased their first property in Auckland at the age of 21. They were in their first job and had never had debt ever before, so they also didn't have any credit history, which was no problem at all!
With 10% deposit they had saved, it showed the bank that they were a diligent saver and good with managing their money. We got an approval within 4 days of our first conversation, with the property settling just a month later.
Can't refinance because house value dropped?
Did you know that Loan to Value Ratios, or LVR, are only applicable to new lending? Property values have dropped. But it doesn't affect your ability to refinance as much as you might think, as long as your loan amount doesn't increase. Even for investment properties with over 65% lending, you're in luck – we've had success with major banks allowing up to 85% lending.
We recently helped a client refinance their owner occupied home and investment property from a second tier lender where they had an interest rate of 11%. Because they moved to a main bank, they saw savings on interest rates immediately!
Whatever your situation, we're here to help with your home ownership goals. Book a free, no-obligation call with a Tella mortgage expert now.
Category:Newsletters
Category:
Newsletters