Buying your first home can be incredibly stressful – and arranging the finance for that purchase is probably the most challenging part. Aim Financial Services will assist you throughout the process, not just in having the loan approved but in structuring the loan and negotiating with the bank to ensure you get the best possible terms.
When assessing a loan application for first home buyers, lenders will consider the following:
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 as 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.
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:
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.
You may also qualify for a First Home Buyers Subsidy, depending on your purchase price and earnings.
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.
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.