How do I submit an offer on a house?
When buying a home it is important to remain rational and to do your homework. A house is worth the maximum......
At FoxPlan we believe our lending team is first-class and two recent success stories demonstrate the lengths our team will go to when it comes to securing first-home finance.
Setting the Scene
Our team recently had a couple come to FoxPlan with a $105,000 deposit. The couple had approached two other mortgage brokers and their bank prior. They had heard the same thing from all three about their borrowing potential.
They were told with their deposit; they could borrow five times the deposit amount to a total of $525,000 and if they wanted to borrow any more – their parents would have to gift them some cash. The couple had parents who desperately wanted to help but didn’t have any spare funds, they did however have a property in freehold (no mortgage).
As anyone looking in the Wellington market knows right now, $525,000 will not purchase a lot of house – especially for a young couple looking to start a family.
Our mortgage adviser was able to put two options in front of the couple.
The first option was second tier lending. Second tier lenders (such as credit unions and building societies) are not governed by such strict Reserve Bank regulations as Banks, allowing them more flexibility in offering home finance for couples with only a 10% deposit. They do however charge higher interest rates. At FoxPlan we use these lenders as a short-term solution to build up to 20% equity so that borrowers can return to bank rates as soon as possible.
The second solution was to bring in the parent’s equity via a guarantee. By guaranteeing only a small portion of one property for $50,000, the couple were able to have an effective deposit of $155,000 borrowing up to $775,000 at standard bank rates! No gift was required and suddenly home ownership became a real dream. The couple are now pre-approved and actively house hunting.
At FoxPlan it is about doing the right thing for the client – even if it means our mortgage advisers taking on more work to find solutions.
Buy with a mate
Another successful case we had recently involved two young friends struggling to get into the Wellington market. Both had savings but were a long way off being able to purchase a property alone, so they pooled their resources together.
Our mortgage advisers were able to assist them in securing bank finance with each party having individual payments towards the mortgage. Banks understand the market is difficult for first-home buyers and are increasingly more open to alternative finance arrangements.
There is no escaping the truth that right now it’s hard to afford a home in Wellington but some creative thinking with the right mortgage adviser may well get you there a lot faster than you realise. If you would like to discuss your first-home finance options, please email email@example.com to arrange a meeting or phone call.