If your mortgage application has been declined, the most important thing is to understand why. It’s an opportunity to ask questions and get advice, so you can develop a new strategy.
To help you make the most of this first step, see our guide on what to do when your application is declined. It explores the main reasons for declined applications and what you might do to avoid another “no” in the future.
The next thing is to deepen your understanding of relevant mortgage-related topics. Everyone‘s situation is different, so this guide is designed to help you find the information you need.
Further reading to prepare you for next time
Knowledge is power, when it comes to getting a mortgage. The more you know about home loans and the process of getting one, the better. Since mortgages.co.nz launched in March 2021, we’ve assembled a library of guides and articles that will help you to understand the home loan landscape in New Zealand. You can link to these resources below.
Getting help to get a mortgage
In recent times, having an expert coach to help you through the mortgage application process has become commonplace. The new UMI rules are throwing a spanner in the works for many would-be borrowers, so more people are calling on the services offered by mortgage brokers (aka mortgage advisers).
- We’ve written a guide called what does a mortgage broker do? It explains the role of a broker, the pros and cons of working with one, and how to make a choice.
- You can also check out our article about who pays a mortgage broker. This is a transparent look at how brokers get their income.
- If you want to work with one of the best mortgage brokers in New Zealand, take a look at our mortgage adviser page. It includes an online questionnaire, which assesses your chance of loan application success, to assist broker selection.
Mortgages 101
Even if you’ve decided to work with a mortgage broker, it’s smart to update your knowledge about mortgages. Conversations you’ll have with an adviser or a lender are much easier when you know what’s what.
- A good place to begin is your guide to getting a mortgage. It provides a step-by-step strategy for financing a property purchase.
- If you come across words and terms you don’t understand, like LVR and UMI, check out our guide to understanding mortgage acronyms and terminology. It throws light on some of the jargon that’s used by brokers and lenders.
- You might also be confused about the word ‘mortgage’. Is it the same as a home loan? The words are usually interchangeable, however a mortgage is actually a legal agreement. We’ve written an article about the difference between a loan and a mortgage.
- Getting your deposit together is always a hot topic for property buyers, especially those looking for a first home. Check out our article about gathering up a deposit to buy a first home. It covers all the deposit basics.
- It’s always useful to understand how mortgage interest is calculated, so that you can develop a strategy for paying less interest over the life of your loan.
- Finding a suitable property to buy is often directly tied to how much you can borrow. Our article how much can you borrow for a mortgage in New Zealand will help with that.
- Purchasing a property is an expensive business and sometimes there are costs you’re not prepared for. Go into property hunting with your eyes wide open by reading what are the extra costs involved when buying a house.
- Have you heard about mortgage insurance? Our article what is mortgage insurance and how does it work will help you to understand the two types of insurance that might be mentioned to you while applying for a home loan.
Types of home loans
These days there’s a full menu of home loan types and variants to choose from. You might want just one or you could go for a combo, to minimise interest or maximise flexibility. Our resources will help you to understand every flavour of loan.
- For starters, read our guide called types of mortgages – which one is right for you. It summarises the options that may be available.
- To find out more about loans with interest rates that go up and down, read our what is a floating or variable rate mortgage article.
- And to understand loans that have an interest rate that stays the same for a set term, take a look at our what is a fixed rate mortgage article.
- Offsetting is a popular practice that helps to reduce the interest you pay. To find out how it works, read what is an offset mortgage.
- Or are you a property investor who wants to pay only interest, no principal? Check out our article on what is an interest-only mortgage to find out more.
- You might have heard about the benefits of a revolving credit home loan, which is like a bank account with a very large overdraft. Read what is a revolving credit mortgage to understand if it could work for you.
First home buyers
Buying your first home is a major life achievement. Like the other things you’ve worked for, it requires careful thought and planning. Several of our guides and articles are targeted directly to first home buyers.
- Our first home buyer’s guide gives you a broad overview of getting a deposit together, types of mortgages available, paying off your loan and other aspects of the home buying process.
- Many first home buyers know they can use their KiwiSaver savings as part of a home deposit, but did you know about first home grants? A complete guide to first home loan grants and KiwiSaver is helpful when you’re trying to maximise your deposit.
- If your deposit isn’t as big as you’d like it to be, you might want to find out about low deposit home loans. Low deposit lending comes with extra cost, but it could be what you need.
- If your family have offered you some help to get you onto the property ladder, check out our guide to how parents can help their children buy a home.
- It’s always good to think about the bigger question – is it better to rent or buy a home? For some people, home ownership can get in the way of other life goals.
Self-employed borrowers
If you have your own business or work on a freelance or contract basis, the requirements around proving your income and looking attractive to a lender are different. Our guide how to get a mortgage when you’re self-employed talks about how to prove your income and the benefits of approaching non-bank lenders.
Getting a loan for a new-build
When you’d rather build a new home than buy an existing dwelling, the home loan process is different. We have four articles that will help you to get up-to-speed on buying land and taking the new-build route.
- Before you commit to land or a house and land package, it’s sensible to explore the new home vs existing home debate.
- Maybe your dinner conversation is all about what does it cost to build a house in NZ? It’s a big question with many twists and turns.
- Once you’ve confirmed that a new-build is your dream, finding a site can be the next step. Check out our guide to buying a section or land to build a house in NZ.
- Before your new-build project can get off the ground, you’ll need finance. Read our guide to new-build construction loans for general information and tips.
Investing in property
Owning more than one property is how many Kiwis get wealthy. While the market has fluctuations, long-term property investment is usually a reliable path to improved net worth. But success often depends on the decisions you make while putting together an investment property portfolio. We have several guides that can help you to make smart choices.
- Begin by reading our guide to buying a second home in NZ. It’s an overview that covers equity calculations, deposits, choosing a renter and much more.
- Along similar lines is our first-timer’s guide to investing in property. It covers the benefits of property investment, the bright line test, choosing between commercial or residential and more.
- If you want to fund a fun retirement, check out our article about planning a property portfolio for retirement income. And remember that retirement doesn’t have to start at 65 – it can start a lot earlier!
- When you start talking with experienced property investors, you’ll soon hear the word ‘yield’. Understand what it means by reading how do I calculate yield on a property investment.
- Maybe you’re interested in gathering commercial property for your portfolio. If so, read our
beginner’s guide to commercial property investment.
Accessing equity in your home
Many Kiwis find themselves in an ‘asset-rich income-poor’ category, especially as they get older. It means you have lots of money (equity) tied up in your home that can’t be accessed for everyday use. If income is becoming a challenge and you want to release some equity, you can consider getting a reverse mortgage or refinancing your home. To find out more, check out the articles and guides below.
- First up, get your head around what is a reverse mortgage. If you’re over 60, this type of mortgage could be the financial boost you need.
- Dig deeper into the world of reverse mortgages with our complete guide to reverse mortgages.
- If you want to look at refinancing your home to release some equity, you might be wondering how often you can do it. Read our article how many times can you refinance your home loan.
Mortgage housekeeping
To round things off, we recommend thinking ahead to when your loan application is approved. Then you’ll move onto new challenges, like paying your loan off faster, re-fixing, reducing payments if you’re in a jam and finding money for an emergency. Take a look at the resources below.
- For an overall view of mortgage management, read our guide to managing your mortgage. It’s full of handy info for new borrowers.
- If you want a more intense look at ways to shrink your loan as quickly as possible, read our article how to pay off your mortgage faster.
Visit our Learning Centre to see all our guides and articles.
