You’ve got your heart set on buying your first home, you’ve saved like mad, you’ve used an online calculator to figure out roughly how much you might be able to borrow, and you might just have found the perfect home… now what do you do?
Come see us
Although it might seem daunting at first, the home loan process is nothing more than the bank getting to know you a little better and, together, coming up with an idea of how much you can afford to borrow. A face to face meeting is often the best way to do this and you can arrange one of these in many ways – use an online form on the bank’s website, give them a call on the phone, or pop in to a store. With the meeting time sorted, it’s time for you to prepare by digging out some vital information.
Proof of income
First things first, when a bank decides whether or not to approve your home loan application, they’re going to want to know that you can pay the loan back. They’ll figure this out by asking for evidence of your income, usually in the form of one of the following things; two recent, consecutive payslips, a copy of your employment contract or a letter from your employer stating your income.
If you’re self-employed things are a little different and you’ll need to bring copies of your last two financial statements (the ones your accountant draws up for you).
Estimate your expenses
With proof of your income covered, we then need to know how much you spend each month on, well, everything. Don’t worry, we won’t ask how much you spend on chocolate milk, we’re only after generic expenditure. This is simply so we can estimate how much of your income will be available to cover the home loan payments – because neither the bank, or you want to see you over-burden yourself.
To do this, sit down and make a summary of regular expenses such as rent, power, gas, water, food, internet, phone, rates, transport, insurance and debt payments (credit cards, store cards, personal loans and so on). Write it down on paer, or use a website like sorted.org.nz to create a monthly budget, it doesn’t matter, as long as the bank can see your outgoings, that’s all we need.
Who are you?
If you’re not already a customer, we’ll need you to prove you’re you. Funny as it might sound, sometimes it’s the simplest things that throw a spanner in the works. So don’t forget you’ll need two forms of ID (one with a photo of you on it like a driver’s license or passport) and proof of your address so we know who are you. Likewise, you’ll need to dig out copies of your bank statements covering the last three months, if you can’t get these through online banking (and didn’t save any paper statements that arrive in the mail), you’ll need to order these from your bank.
Confirm your deposit
While we don’t want you bringing in a giant pile of cash, we do need evidence of your deposit. This can be something like a bank statement or term deposit receipt to show off all your hard work saving.
Bring along all the documentation you have with regards to the home you’re looking to purchase. If you have already found a property you’ll need to provide the bank with the signed sale and purchase agreement. In some cases, the bank will order a valuation, but we’ll let you know the requirements once we have the property details.
And remember: until you have finance confirmed, make sure any offers on properties are conditional upon finance.
Present a good case!
Last of all, the better organised you are when you arrive at the bank, the more streamlined the process will be. Not only does it slow things down if you don’t have all the necessary documents to hand, but we’ll be more impressed if you look like you’re taking things seriously by being well prepared. We’re only human, after all. With all of this information entered into the computer, the application will either be approved…or not. All going well, you’ll be moving in before you know it.