How much can I borrow
What the banks don’t tell you?
When looking to secure a loan for your first home, banks can feel like your new best friend. They would like to appear this way, as it would not serve them to seem cold and hard like some of their policies can seem.
The Low-Equity Fee
Banks cover themselves and reduce their risks. They are not a charity and will cover any losses by slapping new home buyers with a fee that can be as much as $10,000. They can apply this to anyone borrowing with a small deposit so all banks can charge this sometimes hidden fee (or margin) to make sure the greater risk is covered.
The fee itself is not much to grumble about, it is the elusive nature of the fee, and that there can very little information about it – ask your bank to be upfront about this fee so that you know exactly where your hard saved money is going. Many banks are good about being upfront about this cost, as they should be, and you can decide whether upfront honesty is something you want in a long-term financial relationship with your bank.
The Long Term Cost of Interest
While interest is no secret, how much it will actually cost you can come as a bit of a shock when you don’t see the written figures in front of you beforehand. You can work all year and then look back at your loan and realise you have only paid off $5,000!
It can be surprising about where the majority of your money goes, which is on interest. High interest is something to seriously consider and by laying out the figures in front of you, you can get a better, realistic idea of how much each interest rate level is going to cost you, every year.
Banks Vs Other Lenders
Banks, as previously mentioned, are not charities. They very rarely loan money to anyone they consider to have rocky financial backgrounds, so unless you have a squeaky clean past, you may have trouble securing a loan. Banks are also not motivated to get you the best rates, they are more focused on selling a specific mortgage product which means you may not be getting the best deal, despite feeling comfortable with your bank.
The alternative is a mortgage broker, who only gets their fee if they get your a mortgage, so they are very motivated to get you to sign on the dotted line – for the best rates that might suit you better. It is up to you to shop around for the best deal, and the best relationship when considering a mortgage provider.
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What kiwis are saying about usOur journey with our clients lasts beyond the life of their home loan. That’s why we ask them to keep us posted on how we are doing along the way.
Satish is a very honest man and genuinely cares for his clients. He gives very good advise to his clients based on their needs. I would highly recommend using his services. He also gives his 100% to get the best deals from the banks for his clients.
I have dealt with Satish on more than one occasion – primarily for arranging mortgage. I have found Satish a very knowledgeable and reliable person to deal with and he has a pragmatic approach to solving problems. I will be happy to deal with him again for any mortgage/financial advisory related matter and without any doubt recommend him to anyone seeking such services.
Satish was very helpful and informative in arranging finance for the home buying process. He clearly advised of all available options for the process and ran through the best fit for our situation. I highly recommend Satish.
Satish has been extremely friendly yet professional in his business dealings with me. He knows his subject very well, and provides valuable financial advice. I would highly recommend his services to anyone, because I have found Satish reliable and helpful.
I have solicited Satish’s advice quite a few times relating to Mortgage. At all times he has been able to provide insights that has helped me arrive at informed decisions. Satish’s candidness and willingness to help is highly commendable. I would have no hesitation in recommending him at all.
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Latest Interest Rates
Check out the latest interest rates figures for all the banks in one convenient place with our helpful interest rate tracking tool. Remember we can often get even better interest rates so give us a call when you are ready to take the next step.