By Rupert Gough
Forms, forms, wonderful forms. The mortgage application isn’t the most enjoyable part of negotiating a home loan. But there are ways to make it easier, writes Rupert Gough.
At Velocity, the majority of our days are spent helping our clients either move to a more suitable bank for them or finding the best bank for their new home purchase. So we deal with a fair few mortgage applications and I’d like to share my top three tips on how to make your mortgage application process much smoother.
1) Order your own credit report. It is free to order your credit report and takes approximately 10 days to receive it in the mail or to your email box. It’s very useful for you to see how your credit rating is and the banks love it when we give them all the information up front!
We’ve found the best website to start with is here. You can also set your credit report to turn up automatically every month for a low monthly payment at http://mycreditfile.co.nz. When you come to see us, bring that credit report and we’ll include that as part of your application.
2) Prepare a budget. The most important thing is to show to the bank how much you earn, how much you spend and, with the remaining amount of money that you have in the month, how much you can afford on the mortgage.
There are a couple of different types of budgets. While some just break down your expenses into different categories, we have a version that allows you to break down how much you think you spend and then compare it to last month’s actual bank statement. You can therefore see where the really big spending is occurring.
If you want a copy of our budget sheet, we’re happy to send it out to you. Please drop us an email.
3) Payslips and Financials. If you’re self-employed, we’ll need your most recent financials for your business. Often self-employed people haven’t got their financials completed yet. If it’s past September, then we’ll need the most recent March financials for you. This bit is unavoidable because the bank needs to know how much you’ve been earning recently.
If you’re an employee, we’ll need at least three recent payslips to get your mortgage underway. Some payslips are difficult to obtain and you need to request them from your HR departments. This may take a couple of days so getting them early makes the process a lot easier.
Bonus Tip: If this is your first home purchase, organising your KiwiSaver withdrawal early makes the process significantly easier. It can take two to four weeks to process your KiwiSaver withdrawal form so the earlier you do it, the better.
If you’ve got any more questions about getting ready for your mortgage application, you’re always free to call one of our advisers.
Rupert Gough is an Authorised Financial Adviser and part of the VitalSure team. No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.