Understanding Your First Mortgage

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From The Ground Up

A mortgage is lot like that dream house you have in mind: it needs a good structure, otherwise it could bleed you dry in the long run. Figuring out how to structure your first mortgage is exactly what we are here for: our advisors take into account your personal lifestyle and financial situation to provide the foundations that best suit you.

Before you Proceed, What do You Need?

Having a deposit is the first step, most lenders will require a minimum deposit at least 20% of the total home loan – so if you are borrowing $700,000 you’ll need a minimum deposit of $140,000. If you don’t have the 20% deposit there are some exceptions such as the Welcome Home Loan scheme for first home buyers, which brings the deposit down to 10%. On the other hand, if you are in a position to pay more than the 20% minimum you can pay less in interest over the long term.

Figuring out the math is the most important part of setting yourself up, and that’s why have financial in our name, we can offer professional advice on how to sort your deposit before you even talk to the banks.

If you are also part of the KiwiSaver scheme, this can also be utilised to help with your deposit, you can read more about that here.

What's The Commitment?

With the most common type of home loan, you can choose a term up to 30 years with most lenders. A reduced term is usually recommended if suitable, which can help you be mortgage free faster. We can help you figure out which path is best to take by analysing how to best set up your repayments based off your financial situation.

Reality of Repayments

Depending on the bank, repayments can be made weekly, fortnightly, or monthly, but it can be smarter to have a habit of structuring your repayments more frequently. Loans are usually structured so that Interest is usually paid off in your early repayments, and latter payments repay the initial amount borrowed.

Additional Costs and Security

When you buy your first home you don’t just take on a mortgage, you also take on a bevy of extra costs that you shouldn’t overlook. Once you have brought your first home, you become a ratepayer, these are charges set by local councils to cover the cost of things like roads, water supply, sewerage and parks – and can be in the thousands.

Insurance beyond house and contents is also important to consider. Additional insurances such as Mortgage Protection Insurance helps cover your mortgage or rent payments if your ability to earn money is affected by serious illness.

We have expert local knowledge to help advise you on these additional costs while also offering a selection of insurance options to help streamline all your financial needs

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