By Willie Gunn
If you’re a Jedi knight and Darth Vader is steering down at you from the pointy end of a lightsaber, you’d use the Force. If you’re a hopeful first-home buyer or budding property investor steering down the barrel of dealing with banks and a runaway property market, you’re probably best seeking out a reliable group of professionals.
You may be in a position at this very moment to get a home. Or you may be where I am currently with my goal of running a sub-40min 10km—still with quite a bit of work to do! Either way, it makes things a lot easier to know where you are by having your professionals involved. Make sure you have your accountant, lawyer, and mortgage advisor all working together to get you where you want to be!
And here are some professional tips for tapping into the property market’s Force this summer:
Ghostbusters!
Ever heard of “ghost deposits”? They’re the ones you thought you could rely on—family giftings or the old boat you’ve been meaning to put up on TradeMe—but when the bank comes knocking, suddenly they don’t materialise.
So, to combat those ghost deposits, ensure that your deposit is readily available well before putting any offers down. Having a good understanding of how much deposit is needed (and when) will help with keeping things stress free. Nothing screams “stress!” more than realising the family gifting that you were relying on is still locked away in a trust account somewhere or that there is now an initial 10% deposit due that you were unaware of.
Paint it Black (not red)
If a bank is going to lend you a bucketful of money, they will expect you to have a history of paying your bills on time. Anything red in your bank statements usually indicates a missed payment of some sort.
While a very slight dusting of red is understandable (one time I dreamt that I paid my credit card balance … then forgot to in real life!), if your statements are raining red then it’s time to pay them a bit more attention.
Money Talks
No, we’re not making reference to the 1997 bomb-of-a-movie starring Chris Tucker and Charlie Sheen. If you are buying a property with anyone else, then you might want to think about seeing your lawyer about a Relationship Property Agreement and a Will. The purchase of a property brings a huge change to your life, and letting your lawyer help you work out all the finer details of where everything might end up, given a variety of scenarios, is a pretty good idea. A lot better than wasting 97mins of your life on a terrible 90s movie anyway!
Show me the Money! (Well, show the bank, not me.)
Can you afford your future mortgage now? Combined, your current rent, KiwiSaver contributions, and savings should all add up to be equal to (or very close to) your intended mortgage repayments. Banks are there to lend you money, and you can make it easier for them to agree to that by showing that you can already afford your mortgage repayments. Show them the money! (Thank you, Tom Cruise/Jerry Maguire, for this memorable quote.)