Great news – your pre-approval has come through, which means you’re about to hunt for your dream home. For most New Zealanders, owning a home is a big deal – whether it be a lifestyle block, a simple home in the suburbs or a 10th-storey city apartment – and you want to get as much bang for your buck as you can. For pre approval , you can directly contact to Banks or private lenders or you can contact to mortgage broker in Auckland or other cities. A mortgage broker can approach to bank on behalf of you and prepare all documentation based on banks or lenders lending criteria.
Auckland is New Zealand’s fastest-growing city. Over the next 20 years, the number of people who call Auckland home is expected to grow by just over 30% – almost double Christchurch’s population.
The average price for a property in Auckland has risen exponentially in recent years. Even this year, as the world has grappled with a global pandemic, the median house price in Auckland has increased by 25%. A growing population adds even more demand on a market that is already under immense pressure.
But, when all hope of buying a home in the City of Sails might seem lost, we’re here to tell you that there are some hidden (and affordable!) gems still waiting to be found. Where are they hiding, you ask? First, you need to look in the right suburbs.
Best value suburbs in Auckland for first-home buyers
Location is one of the many things to consider when buying your first home. You might want to be close to work, or at least have easy access to a motorway on-ramp or public transport. Then there’s proximity to schools and other amenities.
Auckland has a total of 55 suburbs, with the median house price ranging between $944,700 and $1,604,250. You likely aren’t looking to purchase a million-dollar first home, so let’s look at Auckland’s top five most affordable suburbs for first-home buyers (based on distance).
Be sure to consider more than just location
It can be easy to get caught up thinking location, location, location, but there are several other factors that you’ll need to consider when you’re scouring the property listings on Trade Me.
Type of home
For some, it’s the traditional white-picket-fence, three-bedroom home that they’re pining for. For others, it’s a DIY-project or a townhouse down a shared driveway with no lawns.
Buyers with a budget of $650,000 could purchase a well-located apartment or terrace home, or they could buy a brand-new build that’s 25km away from the city centre. Define what the perfect home means for you and make a list of your top priorities. This will help you narrow down your search.
What to avoid
As the old saying goes, don’t judge a book by its cover. Buying a house is a big financial investment, so you want to make sure you get it right. That means doing your due diligence to ensure the property is structurally sound, and not a leaky home.
The rise in Auckland house prices has been led by one simple factor – demand exceeds supply. It has become challenging for first-home buyers to find an affordable home in New Zealand’s largest city, but it isn’t impossible if you know where and what to look for. Focus on properties you can afford today, tomorrow and in the future. No one truly knows what house prices will do in the next few years, but with a little planning and some strategic know-how, you can find your dream home in Auckland – without it costing an arm and a leg.
The interest-only mortgage involves a borrower taking a mortgage, and they are required to pay the resulting interest on that loan first for a given period. The principal will be repaid either in subsequent payment or in a
lump sum at a specific date. It is a very common process in money lending.
So necessarily in this type of home loan or personal, for the initial repayment period/years, only the interest is paid as opposed to the norm where you pay both the interest and principal at the same time. These interest repayments could be made throughout the entire loan period or for a specific time. The good thing with this type of mortgage is that you will be making lower payments for some time, which could mean you can invest your money somewhere else in the meantime.
Advantages of taking Interest-only Repayment Options:
Low monthly payments:
If anyone takes these options, it can help to structure low monthly repayments in a hard time. A person servicing an interest-only mortgage usually pays low repayments for the loan. That is because they will be servicing only the interest, which is, of course, not high. The other bank loan repayment strategies involve repayment of the principal and interest at the same time.
It can be very handy to make an effective investment strategy. For a person that has a growing stock portfolio in any financial market, they would not be willing to let go of their investments to finance the mortgage. You could also be having sufficient cash flow to repay the mortgage, but you plan on saving it for retirement purposes or want to invest in equity. The interest-only mortgage will be convenient in such scenarios. If anybody chooses these options, they can get a flexible term to repay.
It can help a person to rising income too. Well, taking a loan as a student would be overwhelming since all your cash is spent on tuition. However, if you just cleared school and already secured a job where you are sure of a paycheck every month, then you can take this mortgage and save yourself the home purchase cost.
You can secure a bigger house:
Many property investment experts said it can be a handy way to secure a bigger house buy saving a deposit. The interest-only mortgage will be beneficial if you are expecting lots of cash flow in the future. However, you should also assess whether the home you are planning on purchasing can be easily financed now before you receive the huge lump sum in the future. The loan payments will shoot afterward, and you will have to remit more copious amounts.
Pay scheduled Equity:
Many of the interest-only mortgages will not restrict you from adding cash on the interest repayment to reduce the principal. Such as act will lower the payment afterward when repaying the principal. It is helpful when the guarantor has varied income every month. That means that in some months you can pay less than the required while in some you pay more.
Rising housing prices:
A property investor can make a good amount of money by using this technique. They can reschedule interest-only loan & invest saving to buy another property. In increasing market prices for houses, several investors will take in the interest-only option and purchase the property. They will then sell that property after a few years before the principal repayment period. They will make some profit from such an investment. However, this is ideal for investors who are risk-takers and can take any setbacks that may occur in the future. Supposing the house prices do not hike and you fail to secure someone to purchase the home? You could end up selling it at a loss or being declared bankrupt since you were unable to finance the principal.
When you pay further installments, they go to the principal. That means that when paying the principal, you will pay in less monthly installments, but for the other loans, even if you overpay some payments, the monthly installment for the principal is not reduced in any way. With reduced monthly installments you are sure to even continue overpaying the installments. Hence you will have an easy time repaying the loan as you service your other investments.
The amount paid during the period for repayment of the period qualifies to be tax-deductible. That technically means that this amount shall be deducted from your taxable income. It is an advantage in that you will pay less in terms of taxes and probably use the cash for some other investments.
During the COVID-19 pandemic, the New Zealand government announces mortgage holiday & interest-only loan options for all citizens & residents. It can give at least a hope not to stress during a global pandemic. If any of them facing financial difficulties or stress during COVID-19, they should contact to their financial advisors or bank to get this type of financial relief.
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