Securing a home loan is a significant financial commitment that often takes years of consideration. After all, home ownership comes with a number of different responsibilities, especially across New Zealand, where environmental and zoning regulations are stringent. Nonetheless, when the time comes, many prospective homeowners are eager to close the deal on their dream property! Many make mistakes regarding their home loan as a result.
This blog, delivered by the home lending experts at Simpler, explores three common home loan mistakes and how to avoid them. Read on for more:
1. Accepting the first home loan offer you receive
When looking into home loans, many borrowers make the mistake of accepting the first offer they receive. This offer generally comes from their existing bank, but this doesn’t mean that it offers you favourable terms or interest rates. Always shop around, and compare home loan rates, terms and additional fees from various banks or lenders. If you assist the aid of a mortgage broker at Simpler, we’re also able to negotiate better terms on your behalf. Even a small reduction in the interest rates could save you thousands in the long-term.
2. Overlooking interest rate fluctuations
Because interest rates are constantly shifting, and they can be difficult to understand as a concept, prospective homeowners often overlook their potential fluctuations when choosing their home loans. However, interest rates can massively affect your monthly repayments! For this reason, it’s always advisable to consider a fixed-rate home loan before a floating rate one, as your repayments are set regardless of interest rate fluctuations. Otherwise, we recommend staying informed about economic trends through reliable sources, and researching how rate changes will impact you and your loan.
3. Underestimating additional costs
Unfortunately, your home loan amount and the repayments required aren’t the only expenses that are associated with buying your own home. There are additional, upfront costs. For example, the cost of legal fees for negotiating the purchase, property inspections, valuation fees and more. There’s also house insurance to consider, alongside regular maintenance work and an emergency fund if you find yourself unable to afford your loan repayments. Never underestimate the costs atop your home loan repayments, or you may lose your new purchase.
To apply for a home loan with the expert advice you need to avoid these mistakes, contact Simpler as soon as possible. We do exactly what our namesake suggests – that is, making home lending simple for clients across New Zealand. Our professionals break down the intricacies of home loans in New Zealand so that you get the best terms possible.
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