Wondering how it all works or where to start? Here’s an overview of the process.
Pre-approval
Obtain a mortgage pre-approval with the help of Wellington Mortgage Brokers. Based on your needs we help work out your budget for the home purchase and work out the best bank or lender to work with initially.
With a pre-approval you can now go out and place offers on homes.
Making an offer
Depending on your deposit situation, you may need to have a ‘Subject to Finance’ clause in the contract. You may also put in conditions relating to searching and approving the title (recommended), LIM report, builders report, engineers report, selling a house, valuation (can be part of finance clause) and any other specific clauses you need e.g. front door repaired before settlement.
Remember to tailor the deposit on the contract to what you have readily available in cash to a maximum 10%. Legally you do not have to pay a deposit on the actual purchase contract.
The real estate agent presents the offer to the seller and there may be counter offers back and forth. Price and terms are then agreed.The agent sends signed contracts to the buyer's and seller's lawyer and mortgage broker.
The buyer works to cover off the conditions (within specified days) in the contract with the help of other parties such as lawyer, mortgage broker, building inspector etc.
Going unconditional
Once all the conditions are ticked off the buyer confirms the contract via their lawyer. A deposit is then paid to the agent. The agent will eventually deduct their commission and pass on the balance to the seller.
The mortgage broker will confirm final loan structure with the buyer, haggle rates with the bank, arrange to lock in rates for settlement day, arrange insurances if required and advise bank of final details.
The bank sends loan documents to the buyer’s lawyer. The buyer signs documents off with their lawyer.
Settlement
Usually the day before settlement the buyer does a pre-settlement inspection (recommended) and checks everything is in order including checking the chattels list.
Settlement day – the bank sends money to the lawyer to effect settlement. The bank takes the mortgage over the property. Once the money has been transferred, the client obtains the keys from the agent and moves in.
Useful Resources
Here is a copy of the REAA Sale Purchase Agreement guide.
Finally, there are some great sites for finding property, realestate.co.nz, trademe.co.nz and open2view.co.nz.
Interested in finding out more about our help for first-home buyers? Please watch our video below and contact us today to discuss your options.