It can be unnerving approaching your lender for a home loan, particularly if you’re a first home buyer unsure about the home buying process. Many first home buyers (and existing homeowners and investors too) find it easier and less stressful to work with a mortgage adviser. If you haven’t worked with a mortgage adviser before, here’s an outline of what you can expect, starting with the initial meeting right through to refinancing and refixing.

Meeting a mortgage adviser

Your first meeting with a mortgage adviser is an opportunity to talk about your home buying goals, and for your adviser to get an understanding of what your financial situation looks like.

Your mortgage adviser can help you understand home loan jargon like loan to value restrictions (LVR), Low Equity Premiums or Low Equity Margins, and the different types of interest rates. (And here’s a useful guide of mortgage terms and home loan jargon.)

They’ll also outline the home buying process, and provide financial advice about saving a deposit, consolidating debt to reduce high interest debt, using KiwiSaver, or how your parents or family could assist as a guarantor or with a cash gift to boost your deposit.

Your mortgage adviser will give you an indication of which lender might be right for you, and let you know whether your financial situation is sufficient to start house hunting right away, or whether you need to save for a little longer.

Lastly, your mortgage adviser will disclose to you fees payable by you if any, what is in it for the mortgage adviser (i.e., the remuneration they will receive from lender or lenders they recommend to you), any conflicts of interest, what should you do in case you have a complaint and much more.

Getting pre-approval

Before you start house-hunting, it’s a good idea to get mortgage pre-approval. Mortgage pre-approval is a conditional approval from a lender confirming the amount they may be prepared to lend to you, provided certain conditions are met.

Having a mortgage pre-approval not only saves you time by ensuring you can move quickly when you find a home to buy, but it also means you won’t waste time looking at properties you can’t afford.

Your mortgage adviser will need the following information from you to apply for a pre-approval on your behalf:

• 3 Months’ worth of payslips - if you’re self-employed you’ll need the last two years of your financial statements prepared by an accountant
• 3 Months’ worth of bank statements for the account that most of your income goes into, and from which you do your day-to-day spending and pay bills and living expenses
• 3 Months’ worth of credit card statements (for each credit card)
• A copy of your passport or drivers licence
• A rough budget of what you spend each month - a summary of your income and outgoings
• Confirmation of your deposit which could be made up of your own savings, KiwiSaver, grants or subsidies, a cash gift or a family guarantor
• Current liabilities including hire purchases, loans, or any other debt you may still be paying back

Please note, there may be other documentation that the lender requires so the above list is to be used as an indication only. The full list of requirements will be outlined to you by your mortgage adviser.

Submitting a mortgage application

To present the best possible mortgage application – and to ensure your application is successful - your mortgage adviser will advise you on things like: 

• Paying down high interest debt
• Reducing discretionary spending
• Doing a credit check
• Saving a big enough deposit
• Getting help from family
• Using Government assistance such as KiwiSaver withdrawal or the First Home Grant 

There are also considerations around choosing the right lender, deciding on the right home loan, structuring the home loan, and mortgage options with non-bank lenders if the situation requires, all of which an experienced mortgage adviser can assist with. 

Refinancing and refixing

A mortgage adviser’s role doesn’t end with a successful mortgage application. They can also help with advice around refinancing a mortgage or refixing to a new interest rate whenever the interest rate term ends.  

Booking a home loan review every year makes good financial sense. It’s an opportunity to catch up with your mortgage adviser to discuss your current financial situation, and make changes to your mortgage structure as your lifestyle and budget change.

No matter where you are in your home buying journey, get financial advice from a mortgage adviser. Contact Mortgage Express today to talk to a Mortgage Express branded mortgage adviser in your area.