Step-by-Step Guide to Applying for Your First Home Mortgage in New Zealand with Scott Miller

Welcome back to the Advanced Mortgage Solutions Podcast! 

In this Episode, host Joel is joined by mortgage expert Scott Miller, who provides a detailed step-by-step guide on applying for a new home mortgage. 

Scott discusses the entire process, from getting pre-approved for finance to settlement day, offering tips on real estate platforms, building reports, and loan structures. 

This episode is perfect for first-time home buyers. 

Download the guide at https://www.advancedmortgagesolutions.co.nz/mortgages/first-home-buyers-guide/ and book a free consultation with Scott or his team for personalized assistance. Don't miss this comprehensive guide to home buying!

00:00 Introduction and Welcome
00:47 Step 1: Getting Pre-Approved for Finance
02:05 Step 2: House Hunting Tips
02:53 Step 3: Making an Offer and Getting It Approved
05:02 Step 4: Receiving an Unconditional Offer of Finance
06:00 Final Step: Settlement Day
07:33 Post-Purchase Follow-Up and Tips
09:31 Conclusion and Contact Information

For assistance with a new or existing home loan, reach out to Advanced Mortgage Solutions today. www.advancedmortgagesolutions.co.nz 

Transcript

SPEAKER_02 0:07

Hey there, welcome back to the Advanced Mortgage Solutions Podcast. I'm Joel Stadley, your host, and we have our mortgage expert Scott Miller. Today he's going to run us through a guide on the step-by-step process to apply for a new home mortgage. This is a guide that's available on the website, so feel free to jump on there and download it and add it to your file or print it off. So, Scott, do you want to run us through this step-by-step process of applying for a loan essentially?

SPEAKER_01 0:34

Yeah, sure, Jill. Yeah, look, what we've tried to do here is make it a you know finance a little bit more interesting. It's quite a dry subject, so um, hence the caricatures and um made it a bit of fun in buying your first home. Uh look, the step one is all about uh getting pre-approved for finance. Um, it means that uh when this happens, the applicants have been pre-approved up to a certain level. Usually it's a nominated level that we ask for. And it means that when they find a house, the bank then only has to have another assessment over the security or the property that they're looking to purchase to make sure they want to go into partnership with that particular type of purchase. And like uh around the country and in Canterbury, of course, you know, a good 98% of all securities that are being sold, properties that are being sold would be seen to be acceptable. Um, the exceptions would be things like as is, where is properties or say maybe leasehold land. It gets a bit tricky with those kind of purchases. But coming back to the to the to the guide here, um, we arrange a time at the office for the guys to come in so um we can get the application information down and the supporting documentation required. Um, and then um I send that off to the bank so you can relax on your deck chair there while I've done all the work. Um and the result of that is that we get an offer of finance from the bank, um, and I call you and email you to say, hey, we've got a conditional offer. A lot of people call a conditional offer a pre-approval. Um, there's nothing wrong with calling it a pre-approval, it's exactly the same thing.

unknown 2:03

Right.

SPEAKER_01 2:03

Um, the next step from that point is really then um it's up to the applicants then to go out and do some house hunting. But we highly recommend that you use realestate.co.nz and trade me. Um, you'll find in general that the properties for sale in New Zealand that are being sold through a real estate agent will end up on realestate.co.nz about a week before trade me, and you don't want to be a week behind everyone else. Um, and then you want to keep the trade me going because private sales will be on the trade me um platform that will never be on a real estate agent's platform. So they are the two major um platforms that we'd advise people to go house hunting, and then of course, it is the uh the going out and looking at open homes and um getting a feel for what you really want and getting an understanding of what house prices are really worth. Um and then when you find a property that you're really interested in, um we place an offer on that property. Um I send those conditions and things that would we want you to put in your offer. Um, and then if your offer's accepted, um then we go back to step three, um, which is sort of going back to the banks now with the offer. Uh with your offer, getting it approved. Um, things at that stage are you might want to get a builder's report completed or a registered valuation completed. Um, a lot of people don't buy houses on a regular basis, so it's good to get those, particularly building reports completed. I know nowadays a lot of times a building report is um part of the sale pack. I also recommend that you go out and get your own. We have seen some big differences between what's been supplied as part of a sales pack and then what has actually been ordered by the person that's looking to buy the house. Um, so it does pay to have that you know thorough check done just to make sure that the house is what it says it is. Um, from that point on, we um go a little bit further down step three, um, and you'll see that your solicitor gets involved because they check the lemon title to make sure that um there's nothing about the house that could change your mind on purchasing it. And what I mean by that is you know, there's a road widening scheme in five years' time that's going to take three meters off the front of your house. That might change your you know, your sort of enthusiasm towards buying it. Um, equally, uh, it will tell you if the house is in a contaminated land zone or uh you know a flood zone or a um coastal erosion zone. Um it will tell you all uh all the items that have been approached to council within a 1k radius of the house that you're looking to purchase. So a super important document, just to make sure there's no surprises down the loan um post-ownership. Um and the title just proves really that uh the people trying to sell the house are the people that own the house, it's not the renters trying to sell you the house and make a quick buck.

unknown 4:54

Yeah.

SPEAKER_01 4:55

Yeah, yeah. Um to step four then. Yep, so step four, it's all about receiving that unconditional offer of finance. Um, it means now that we send that through to the client solicitor to make sure that they know on the finance side of things we are where we need to be. Um at that stage, it also arrange, you know, for um house insurance to be um completed just so you know that when you go to settle on the house on the settlement date, you've got full insurance that covers you in case anything should happen to the house. Um and then um as that goes a bit further along, um, what you'll find is uh the solicitor will go back to the the purchases and say, okay, um we've got finance unconditional, we've done the limit title check, we've done the building report, everything's as it should be. You know, do you want to purchase the house? The answer is usually yes. Yes. Um that means that they've now gone unconditional on the purchase. Right. And now we're simply waiting for settlement day. So if you go to the start of the final step, this is all about settlement day. So the the your solicitor, as in the purchase solicitor, has a has let the vendor solicitor know that yes, we're unconditional and we're aiming for whatever date was agreed upon. Um at that stage we get you in for a pricing meeting to make sure that all of the loan structure and everything around what we're setting up suits the the client, not the bank. Um and in that way, um, you know, and that changes vastly on whether we're dealing with, say, a first home buyer that's really cleaned out the cupboards and finance uh in deposit funds just to buy the house and don't have a lot of reserve funds left through to subsident uh purchases or maybe older um demographics that might have a little bit more horsepower in the deposit funds side of things, it would mean we uh very much change that loan structure to suit their personal needs. Uh certainly not the bank's needs. Um, and in that regard, once that's sent through to the lender, um they then write up the full loan documentation that's sent to your solicitor, which of course the purchases go into the solicitor's um office and sign to say, yes, we want to proceed, and here goes the loan structure that we asked you to set up. At that stage, everything's done. We're simply waiting for that settlement day. As you can see in that last slide there, the fireworks are going off in behind the house because that sort of indicates um the settlement day. And then finally, a little bit after settlement day, usually about a month after settlement day, we just follow up to make sure that everything is as it should be. Um do the customers have any questions, um, particularly around the uh the mortgage setup, of course. Sometimes the internet banking can be a little bit tricky, so we take them through that as well. So it's very simple, it's an overview, a helicopter overview of um how to buy a property, um particularly for a first home buyer. Once you've purchased um, you know, once or a couple of times, you sort of get to understand this procedure because as much as it looks like, oh my god, at the start of the process, it is fairly well the same every single time you buy a property. Yeah, what happens?

SPEAKER_02 8:10

Yeah. I like the fact that you follow up sort of a month later just to check in, you know. I think it's pretty important and uh really good service from your point of view in terms of hey, like just checking in, how's the loan structure working out? Because as you've said to me before, when people buy their first home, all of a sudden you've got a new obligation, a new payment obligation, right? I remember back um a thing that I missed, I think, on my first home buy was I didn't pay attention into how often they would be taking the payments. I think it was fortnightly, I was expecting it monthly or something like that, and it threw me off a wee bit. And I was like, oh, you know. Um so just little things like that can be really helpful knowing you've got someone on your side you can talk to, you know.

SPEAKER_01 8:50

Well, a lot of people don't realize that you pay your mortgage in arrears. Now that sounds like it's a bad thing, doesn't it? But it's not, it's just how mortgages work. So if you put if you pick fortnightly repayments, your first repayment will be a fortnight after you buy the property. So you're paying your uh mortgage in arrears. It's not wrong, it's just how it works. If you pay anything else in arrears, and that's that's alarm bells, you know, you're not supposed to be doing that. So a lot of people, you know, find that a bit interesting that you do pay your mortgage in arrears. Yeah, brilliant.

SPEAKER_02 9:21

All right, well, thanks for that, Scott. Uh look for anyone that wants that guide www.advanced mortgage solutions.co.nz.

SPEAKER_01 9:27

Yeah, uh you can also download on the website. Yeah, yeah. So just uh put your name in and it emails it to you. Yeah.

SPEAKER_02 9:34

Fantastic. Uh and look, you can also reach out to Scott. There's web forms there to book a free consultation with him or his team. Uh thanks, Scott. We'll see you next time. See you next time. Bye-bye. Bye-bye.