Beginners Guide: First Time Home Ownership And When To Apply For A Home Loan

Owning your own home is such an exciting prospect, but the journey can be somewhat daunting. If you are embarking on this venture, then keep this handy beginners guide at hand to guide you through first-time home buying and when to apply for a home loan.

Step 1: Planning

Before you jump in and apply for a home loan, it is a good idea to do some planning first. It is never too early to consult a mortgage advisor, as they will be happy to offer guidance right from the start. They can assist in formulating your plan and give top tips on setting savings goals and how to keep on track.

At this stage, it is wise to decide whether you intend to buy an existing home, are looking to build a new home from your own plan, buy off a plan or opt for a house and land package, as this will affect choices in the steps that follow.

Step 2: Deposit

Before you apply for a home loan, you will need to have your deposit ready. This can be anything from 5% upwards, depending on the institution. Bigger deposits of around 20% will attract the best interest rates. Your deposit can be made up from saving, KiwiSaver, family contributions and government grants.

Step 3: Approval v Pre-Approval

At this stage, you will need to apply for a home loan. Your mortgage broker can guide you through the process.

If you have already found a property you would like to buy, you can advance directly to the approval phase. Your mortgage advisor can assist you in finding the right lender that will give you the best deal.

Another option is to get pre-approval. Here your mortgage broker will negotiate the best deal, to a maximum amount of spending, and you can start shopping around for a property in that price range. 

Step 4: Structuring Your Home Loan

A variety of options are available when you apply for a home loan. You can choose between a fixed loan rate, a floating rate or interest only.

Your mortgage broker can offer insights on the best option for your situation paired with their knowledge of the markets and projections of what interest rate fluctuations are anticipated.

Step 5: Finalising Your Home Loan

The last step when you apply for a home loan is to finalise all the details like taking out home insurance, getting a property valuation completed and deciding how to finance the furnishing of your new home.

If you are ready to embark on this exciting journey and want to apply for a home loan, contact Simpler today. We have arrangements with all the major banks and lenders and can guarantee you a great deal on your home loan. We can also give top advice all the way through the steps, from the beginning to the housewarming!

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