Ignore distractions and set yourself the goal of owning your own home.
Focus on the facts. Tens of thousands enter the property market each year in New Zealand and you can too.
Once you’ve set the goal you need to make sure your finances are as healthy as they can be.
Reduce any debt you may have and to do this you need a plan.
Systematically work your way through any debts and minimise them if possible.
A good approach is to focus first on debts with the highest borrowing costs.
Another approach is debt consolidation to reduce the overall interest you are paying and make payments easier to manage.
Close any unnecessary credit cards or reduce limits. With Debit cards most people can remove the need for a credit card.
Minimise or even better close buy now pay later accounts and if you do use them don’t be late making payments.
Make sure you pay your bills on time.
Doing all the above will help improve credit score which will help applying for a mortgage. You do not need to be debt free, but you do need your debt to be under control.
Don’t forget about discretionary spending. Although the rules have changed, it’s still an area to be aware of. Reducing discretionary spending will improve your financial health and you can use these savings to reduce any debt.
It is a valuable exercise to demonstrate that you can afford repayments for 3 months before applying for a mortgage.
Estimate how much you want to borrow with our mortgage calculator
Calculate any difference between rent and mortgage repayments.
Save this difference for at least 3 months.
This will demonstrate to the lender that you can afford the repayments. I
t is important to note that these calculators are a guide and will not give you exact figures as there are several factors that impact the repayment amount.
As a Financial Adviser I can give you advice on any areas you need to work on. I can also refer you to a Money Coach to help you put a plan in place, so your finances tick the boxes for your home loan application.
