Even if you’ve done it before, the home buying process can be confusing, and it’s really easy to forget the steps you need to take along the way.
Here is a step by step guide thanks to Mobile Mortgage Manager Greg Mander.
I think I’m ready to buy a home. What is the first thing I need to do?
The first thing you should do is undertake a personal expense budget based on future costs of owning your own home.
Include in the budget:
- future council rates
- homeowners insurance
- maintenance costs
- loan servicing costs
Next, have some thought about how much you think you can afford, understand how much deposit you have to put towards the home, and research early through various websites, magazines etc about what you want to purchase.
You’ll also want to find a trusted expert, such as an experienced real estate agent to help guide you.
When in the home buying process should you first approach the bank?
Approach your banker very early in this process and get pre-approved prior to begin shopping for a new home.
That way you then know what you can afford to purchase. For example you can act early if needing to attend an auction as a ‘cash buyer’.
What info do you need to take with you to your first meeting with a banker?
- Verification of you being a New Zealand Permanent Resident (copy of your Passport or birth certificate).
- Also a copy of your ID such as Drivers Licence or Firearms Licence is advisable.
- Most recent 3 payslips.
- Confirmation of any other income received (IRD, WINZ, etc).
- Verification of your home address (a recent document addressed to your home such as a phone bill or bank statement).
- Your last 3 months Bank Accounts statements showing your day to day living costs being met.
- If using KiwiSaver funds, a letter from your provider confirming the funds available to withdraw.
- Confirmation from Housing Corp confirming the First Home Buyers Grant if you are applying.
What questions should you be asking your banker at that first meeting?
- Which is the best loan type available that best suits my circumstances?
- How much interest will I pay throughout the loan period and I can I reduce this amount?
- What are all the costs associated with obtaining a home loan?
- Why should I use the services of your bank?
How long does the lending approval process take?
Assuming you provide all the information needed by your banker, generally the lender can process the application the same day, but certainly inside 24 hours.
What other people do you need, and when do you need to approach them?
Engage with a solicitor early and certainly prior to starting the journey of finding your new home.
You may also wish to research building inspection businesses to check over your property (prior to confirming the purchase unconditionally.)
Work with a home insurance company early, as they may require supporting documentation that may take considerable time to accumulate.
Some real estate businesses have specialist home buyers agents. These people can be helpful with sourcing properties fitting your purchase criteria.
What are the things I need to have completed before I can bid on a property?
- You need to have been pre-approved for finance prior to attending auction by your bank.
- Confirmation from your solicitor that the potential property’s title and L.I.M. (Land Information Memorandum) are satisfactory.
- You have confirmation the insurer will provide full homeowner’s insurance for the same property.
I see a house I want. How do I make an offer or prepare for auction?
Talk with your banker and solicitor to ensure you have everything in place prior to making any offer at auction.
A formal offer through a document known as a Sale and Purchase Agreement is contractual and legally binding.
Where in the process do you discuss interest rates and term options?
Generally after your purchase contract becomes unconditional. Good discussions then take place to ensure you gain knowledge of all the financing options available.
What are the parts of the process most people don’t realise or forget to do?
Most people do not have a solicitor organised prior to making an offer to purchase property, and then rely on a last minute recommendation for advice on who to use, rather than research for a solicitor they will work best with.
Often customers leave the approaching of a home insurer late in the process, and forget this can often take considerable time to get home insurance acceptance.
Conditional offer accepted! Now what needs to be done to go unconditional?
Immediately work on having all the conditions made in the contract satisfied. Complete all your due diligence.
Keep both your solicitor and banker informed through this process prior to going unconditional.
What needs to be done before settlement date?
Now would be a good time to complete a full review of both existing and future banking services.
This would naturally include discussions regarding future financial goals, and ensuring you and your family are covered for any unforeseen circumstances.