Darren Pratley

Darren Pratley - Director
The Home Loan Group (NZ) Ltd

Buying Your First Home

Congratulations on making the decision to purchase your first home! The purchase of a home is usually the single largest and most important purchase anyone will make in their lifetime; you need information you can rely on from professionals with a wealth of experience.

Our team has many years experience in the finance industry and strong relationships with a full range of major home loan lenders, and therefore we can provide competent, reliable advice and a home loan to meet your individual needs in the shortest time and with minimum fuss.

Where Do I Start?

We strongly recommend you start by contacting us and making an appointment with one of our Consultants. This can be held at our offices or at your place of work or at your home, at a time to suit you.

It will help if you can gather together the following information prior to your appointment:

  • Evidence of your income(s) by way of payslips, a letter from your employer, a copy of your employment contract or in the case of self employed people, ideally 2 years full financial accounts prepared by an Accountant or taxation professional.
  • Evidence of any deposit you may have. This could be in the form of an investment certificate, term deposit, a gift or funds saved in an account.
  • 3 to 6 months consecutive bank statements
  • Identification such as a passport or driver's license

Your Home Loan consultant will listen to your requirements and outline and discuss with you possible purchasing scenarios based on your personal and financial circumstances, along with a discussing with you which lenders are likely to approve finance and the reasons why. If you are comfortable to proceed we suggest your consultant complete, collate and submit an application for loan eligibility to a lender(s) on your behalf. This is strongly recommended for several reasons:

  • Our consultants do the work for you at no cost and maximise the chances of success.
  • Preapproval gives you the ability to look at properties with sound knowledge of your maximum affordable price range, the associated costs, loan repayment amounts etc.
  • Any issues identified by either your consultant or the lenders are addressed before you enter into an Agreement for Sale and Purchase.
  • Any conditions imposed by the lender (such as additional information to be supplied or a Registered Valuation) are known at the outset.
  • You can enter into a contract to purchase a property (subject to finance) with confidence.

Your Home Loan

Your consultant will explain and discuss all aspects of the home loan finance with you including:

  • choice of lender
  • loan structure
  • loan term
  • interest rate
  • repayment frequency

We offer our experience and expertise to ensure a competitive finance package is obtained, tailored specifically to your needs.


Important Costs to Remember

Registered Valuation:

Generally if you are borrowing in excess of 80% of the purchase price of a property, the lender will require you to provide a Registered Valuation from a registered Valuer. A few institutions may require a Registered Valuation regardless of the level of the borrowing on a property. A valuation can take 2-3 days to be completed, though this can vary considerably and cost can vary depending on location. We work with a number of Valuers who provide us with fast turnaround due to our substantial loan volumes; if a valuation is required we can arrange this on your behalf.

For lending purposes, most lenders calculate security based on the lesser of the purchase price of the property or Valuation exclusive of chattels. This means a property being purchased for say, $100,000 with a Registered Valuation of $95,000 plus $5,000 chattels, has a security value to a lender of $95,000. This can have implications in terms of the maximum able to be borrowed against that property and also can increase borrowing costs.

Risk Protection Insurance:

It is a sad fact that while many borrowers understand the importance of term life insurance cover in the event of death, not everyone understands that the ability to earn income to fund your lifestyle is probably of equal or greater importance. This is even more so given that people today often survive illness and injury which may have killed people in previous generations, but are often unable to work for months while they recover. This has huge implications in terms of the financial security and wellbeing of your family and may even risk loss of the family home.

We have a legal duty of care to advise borrowers of the change in their risk profile that results from raising a home loan. We strongly recommend you meet with the independent insurance advisor we work with, to discuss the risk protection products available in the marketplace and the cover offered.

House Insurance:

All lenders require you arrange and keep in place adequate insurance against fire. This is because the lender takes security over the land and the dwelling on it. Insurance against fire must be in place prior to possession and your Solicitor will need to confirm to the lender that this is in place. Your Home Loan consultant can arrange quotes for you if you wish.

Solicitor:

It is necessary to engage the services of a Solicitor to act for you in purchasing a property, to safeguard your interests in the purchase process and attend to preparation and registration of the mortgage etc. If you don't have a Solicitor already, ask your consultant to recommend one for you. Costs for the legal work in purchasing a first home can range from $800 - $1200 depending on the level of work completed on your behalf. Most Solicitors can provide you with a schedule of their prices but make sure you're comparing apples with apples. Some Solicitors quote their prices exclusive of disbursements, which can add several hundred dollars to the bill.

Lender Establishment Fees:

Each lending institution sets its own establishment fees but generally, the range is $250 - $500. Establishment fees can be negotiable depending on the lender, the nature of the loan proposal, the level of borrowing and degree of risk.


Consultant

We act in the best interest of our clients and with our reputation and large loan volumes, can often give you access to a better loan offer than what would be offered by going to a lender direct. The lenders we represent pay us for the successful placement of loan business.

Disclosure Document:

As part of our loan process we will provide you a copy of your Consultants Disclosure Document. This gives you a full understanding of who we are and how we work. They are also available on the home page of your home loan office.