Your House Buying Team
The Professionals You Need When Buying a House
When buying a house, there is a lot to consider. You’ll need to secure finance, find properties, organise inspections, deal with legalities, take out insurance, and, finally, move into your new house.
Gathering together a great team to guide you through the process will help you achieve your home ownership goal faster, more effectively, and with a whole lot less hassle than if you did it all on your own.
“Teamwork makes the dream work.” - John C. Maxwell
Finance
First up you need to work out much you can afford to repay and how much you need to borrow. You’ll need to take into consideration your income, interest rates, deposit amount and length of the loan. Use our mortgage calculator for a quick idea of what your repayments might be.
Most lenders require a deposit of about 20% of the amount you are borrowing. Interest rates are either fixed or floating. A fixed rate stays the same for an agreed amount of time, while a floating rate fluctuates according to market forces. Both have advantages and disadvantages so obtain advice on which works best for your circumstances.
Types of loans
Loans come in many shapes and sizes. You need to understand the options to make an informed choice.
Fixed interest rate loan – The interest rate is fixed for a period of six months to five years. At the end of the term, you can either re-fix it for a new term or restructure your lending to fit your circumstances.
Floating rate (or variable rate) – A floating rate changes as market factors change.
Revolving credit loan – This one works like a large overdraft. You only pay interest on the amount you have borrowed, not the limit. You can make lump sum repayments and re-draw money.
On our home loans page you’ll find the advantages and disadvantages of the loan types listed above.
Real Estate
Once you have an idea of how much you can borrow, you can start searching for your new home. Generally, you’ll see a price indication. You might see BBO $420,000. This translates to buyers with a budget over $420,000.
You might also come across price indications with GV and RV. Every property has a rating value (RV). This used to be known as a Government Value (GV). The government agency Quotable Value (QV) provides ratings and valuations. Some of their information is free.
As well as helping your find a suitable property, a licensed real estate agent can help you understand pricing valuations and the different buying options such as auction or tender.
The sale price is negotiated between the buyer and seller through a Sale and Purchase Agreement. This document is likely to go back and forth between buyer (with the help of a lawyer) and seller until a final price is agreed.
Inspections
Buying a house falls under ‘buyer beware’, or better safe than sorry! You can’t get your money back after the deal is signed, sealed and delivered so it pays to carry out due diligence. That includes inspections, builders’ reports and LIMs. A builder’s report can help identify potential issues with the house. Things you might not be experienced enough to see at an initial glance. A Land Information Memorandum (LIM) will highlight any issues regarding the land the property is built on. You can order one from your council or have your lawyer arrange it.
Legal
While having a lawyer handle the purchase is not a legal requirement, it can save a heap of time and effort. Just getting your head around the standard conveyancing required is a steep learning curve. A lawyer can help you negotiate the purchase price, check the contract, complete a title search, arrange payments, ensure the right conditions are included, and advise re potential tax implications.
Insurance
Now that you are homeowner you will need to protect your assets. It’s important to consider house and contents insurance. Having house insurance is generally a requirement of having a mortgage. Its also a perfect time to review your life and trauma insurance sums assured and make sure the mortgage payments are covered if you’re unable to work.
Moving
You finally have the key to your new home. You’ll need to organise any maintenance, decorating or renovations. Then you’ll have to organise movers – either a moving company or appropriate vehicle hire (and a team of helping hands if you choose the latter!). Don’t forget to connect the utilities!
Useful resources
$orted guide: Buying a first home – Deposits, mortgages and finances
Download a free Home Buyers’ Guide from the Real Estate Agents Authority
QV property information and advice
How we can help
Having the right team in place is vital. When it comes to finance, our team of qualified home loan specialists can walk you through the different options and our service is free to you. And because we want you to have the best team on your side, we have a list of great real estate agents, lawyers, and movers that we can refer you to. Again, all part of our service, free of charge to you.
Call our team to discuss your home loan questions: adam@nzadvicegroup.co.nz or 0800 230 235.