There’s a lot to know about loans, especially if you’re taking one out for the first time. So let’s knock over some of the common ones, and hope they’re some of yours.
How much can I borrow?
Unfortunately, the answer to this one is ‘Depends’! It differs from lender to lender and can vary quite a bit (depending on their criteria, income, the type of property etc), so it’s really worth shopping around. How much you can borrow also depends on the size of your deposit and can change if you have equity in an existing property already.
What’s the length of a mortgage?
How long is a piece of string? The most common length is 30 years, however the shorter your loan period, the higher the loan repayments.
How is interest calculated?
Your bank will take the outstanding loan amount at the end of each business day and multiply it by the interest rate that applies to your loan, then divide that amount by 365 days (or 366 in a leap year). It will then charge the interest to you monthly.
Why do I need a conveyancer or solicitor?
Their job is pretty important and includes:
This article was supplied by Bruce Patten, International Mortgage Broker of the Year 2006 – 2017. Bruce is always on hand to answer any questions you may have about loans or anything else around the loan process. Feel free to get in touch with him anytime via phone (021 661 114) or email (bruce.patten@loanmarket.co.nz).
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