What you should know before beginning a mortgage

Buying a house is a major milestone in your life. It’s a chance for you to have a home to call your own, and buy something that is a huge investment - one you’ll be able to benefit from in the years to come.

We all know, house prices in Auckland have become staggeringly expensive with average prices over $1 million.  Chances are, unless you’re insanely rich, you won’t have that million dollars in cash lying around your house. If you’re wanting to be a home owner, you’re going to need a mortgage.

Here are two things you should before beginning a new mortgage:

Know the ins and outs of the house

As a first home buyer, there are a lot of things to think about before committing to your first mortgage. It’s important to do some preliminary checks before agreeing to buy a home. You should examine the property closely to make sure you’re getting a home that is exactly what you’re paying for, with no overlooked damage.

Only once you’ve thoroughly checked the condition of the house should you think about making a firm offer. A purchase agreement is legally binding, so you wan’t to be absolutely sure you’re happy and confident with the house before signing.

Try to maintain your financial flexibility

Buying a home is expensive business, and you want to ensure it doesn’t ruin your financial flexibility down the road. You should negotiate your down payment for the house to a number that you can definitely afford. If you overpay at signing, it’s going to put you in a shaky financial condition right from the get-go.

Even after your signing date, you’ll want to keep some savings in reserve to keep you safe if your financial situation changes in the future. If there comes a time where you’re going through a career change or some other financial hardship, having some funds saved as back-up will reduce a whole heap of stress.

Banks or Brokers?

To secure your mortgage, one of your first steps will be to find a good mortgage deal. One of the questions many people face, is whether they should go straight to the bank or whether they should go through a mortgage broker.

Both have their own benefits, but to help you answer that question, check out our article on whether banks or brokers are the better way to go.