first home buying

Getting a Home Loan: Why You Should Sweat The Small Stuff

We’re often told that the little things in life are not worth fretting about, that it’s all about the big stuff: buy a car, get a degree, get a house, get married. However, the truth is, there are actually a number of very little, very important things we need to do to see any one of these big things achieved.

 

Take staying married, for example: If you sweat the small things of dressing nice, smelling nice, remembering anniversaries, listening, giving flowers, saying you’re sorry (often) … then you are more than likely to achieve the big thing of staying married.

 

Getting a home loan is a massive life step, and, it too, is achieved by sweating the small stuff. Here’s why: Banks are looking closer than ever at your account conduct. For example, not paying cell phone bills on time or not making minimum payments on your credit card bill, all seem pretty minor, but can leave little warning signals to your prospective lender.

 

When considering your application, lenders will do a personal credit check. This will show how many people have been enquiring into your credit history, see the number of defaults (if any), and any payment delinquencies. From this information the bank will paint a picture of your financial profile and the risk that you represent for 1) them as a lender, and 2) yourself as a borrower.

 

So, is the small stuff important? You bet! Paying bills on time is increasingly significant and will take you one step closer to achieving the big stuff, in this case purchasing a property.

 

Lance Shearman is a Registered Financial Adviser with Velocity Financial. No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.

When Should You Contact Us?

Lance confesses that, when it comes to DIY, he resorts to seeking out the expert. And he gives you full permission to do the same with your finances: pester your Velocity financial adviser every step of the way.

 

In my family I have one brother and two sisters, and I am the least “handyman” of all of us.

 

My brother, who owns a very successful plumbing firm, was concerned when he came around to my home and noticed the only things in my toolkit were a pair of scissors, a ruler and some moisturiser!  

 

So, of course, whenever any plumbing (or the like) was needed, I had two options: 1) Spend hours trying to figure it out myself through a minefield of trial and era and various YouTube clips. Or 2) Just go to the expert … my brother.

He would either talk me through it over the phone or come round with his massive toolkit and do it himself. Saving me the pain, the time, and ultimately the very real risk I have of making the problem even bigger.

 

They say it takes over 10,000 hours to become an expert at something, so it would take a lot of blocked drains and dripping taps for me to get anywhere near my brother’s expert level in plumbing. Likewise, when it comes to mortgages and financial advice, we at Velocity, are the equivalent of my brother and his toolkit. We deal with banks and legislation changes and the intricacies of mortgage applications every day.

 So when should you call us?

 The moment that first thought jumps into your head to purchase your first home or another property!

 Why? So you can brainstorm with us to come up with some best next steps.

 Our services are free to you. And they’re often accompanied with a coffee, so it’s a win-win!

 Our goal is always to save you time and money. We know how the banks operate and how to find the right fit for you. Many people think a mortgage broker is only here to secure their home loan. Au contraire! We can assist, give advice and organise anything mortgage related—be it changing the structure, negotiating new fixed rates, discounts on floating rates or changing regular repayments.

 Let us at Velocity bring our toolkit and expertise to you. We’ll help get you the right loan and set the right structures in place to help see your plans realised. And, please, if you have a blocked drain, feel free to contact me about that too … I have a pair of scissors that just might do the trick … on second thoughts, I’ll pass you on to the expert.

 

 Lance Shearman is a Registered Financial Adviser with Velocity Financial. No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.

3 Steps to Happier Mortgage Applications

 Our days are spent helping our clients either move to a more suitable bank for them or finding the best bank for their new home purchase.

 There are a couple of tips that we’d like to share this month on how to make the mortgage application process much easier.

 

  1. Order your own credit report.  It is free to order your credit report.  It takes approximately 10 days to receive it in the mail or to your email box, however, it’s a very useful bit of information to see how your credit rating is.  We’ve found the best website to start with is here: https://www.govt.nz/browse/consumer-rights-and-complaints/debt-and-credit-records/check-your-own-credit-report/.  You can order your own credit reports or you can set your credit report to turn up automatically every month for a low monthly payment at http://mycreditfile.co.nz. When you come to see us, bring that credit report and we’ll include that as part of the application.  The banks love it when we give them all the information up front! 
  2. Prepare a budget.  The most important thing is to show to the bank how much you earn, how much you spend and, with the remaining amount of money that you have in the month, how much you can afford on the mortgage.  There are a couple of different types of budgets – some just break down your expenses into different categories. We have a version that allows you to break down how much you think you spend and then compare it to last months bank statement.  You can therefore see where the really big spending is occurring.  If you want a copy of our budget sheet, we’re happy to send it out to you.  Please email us to ask us for a copyof the Excel spreadsheet.
  3. Payslips and Financials. If you’re self-employed, we’ll need your most recent financials for your business.  Often, self-employed people haven’t got there financials completed yet.  If it’s past September, then we’ll need the most recent March financials for you.  This bit is unavoidable because the bank needs to know how much you’ve been earning recently. 

If you’re an employee, we’ll need at least 3 recent payslips to get your mortgage underway.  Some payslips are difficult to obtain and you need to request them from your HR departments.  This may take a couple of days, so getting this early makes the process a lot easier.

 

Bonus Tip:  If this is your first home purchase, organising your KiwiSaverwithdrawal early makes the process significantly easier.  It can take between 2-4 weeks to process you KiwiSaver withdrawal form so the earlier you do it, the better.  Here’s a link to the application form: http://www.hnzc.co.nz/about-us/Forms-and-applications/Kiwisaver-application-form/Kiwisaver-application-form

 

If you’ve got any more questions about getting ready for your mortgage application, you’re always free to call one of our advisers.

 

Rupert Gough is an Authorised Financial Adviser with Velocity Financial. No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.