Questions
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How much can I borrow
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What does a Mortgage Advisor do?
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Can't i just look up the cheapest interest rate on the internet?
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What is the best loan for me?
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How do I pick which lender?
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What are the differences between banks and non bank lenders?
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What does it cost to get a loan?
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What is Lenders Mortgage Insurance?
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Do I need to get other insurances?
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Can I pay extra off my loan?
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How long does the process take?
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What information do I need for a loan application
how much can I borrow?
This is known as borrowing capacity is answered using 2 methods:
1. What will the lenders lend
2. How much can you afford to pay in repayments
At Think Financial Services we believe first the client needs to assess their own affordability, we can assist you with this through Viridian Software Reporting. Once we have your payment figure, we can see which lenders would lend to you. All lenders have different criteria, so you could be approved at one and deferred at another.
what does a mortgage advisor do?
Firstly, make sure you are getting advice from an accredited
NZMBA Mortgage Advisor, this means you will be accessing a specialist service, and that the advisor does access a range of lenders.
Advisors are there to help you through the entire loan application process from collecting your information, making recommendations, presenting and submitting your loan to the chosen lender, and ensuring the process is smooth right through to the settlement of the loan.
BUT your advisor can be so much more, from helping with the whole purchase process, to budgeting advice, and making sure you are still happy with your chosen loan months and years down the track.
In most cases the Advisor gets paid a commission from the lenders so you don’t need to pay them.
can't i just look up the cheapest interest rate on the internet?
Yes, you can. With technology it is very easy to search between the different lenders and the interest rates, but there are many more decisions that would need to be made other than just choosing the cheapest rate, and in some cases the cheapest rate may actually end up being more expensive depending on your requirements.
A Mortgage Advisor can help provide you with this information
what is the best loan for me?
The best home loan is designed to suit you, your life, and circumstances, along with anticipating your future needs as much as possible.
You need to structure your loan for the worst case scenario – example:
If right now you can afford to pay a good loan payment, you may decide to place the loan on a 20 years term, but in a few months your financial position changes and you would prefer to reduce your payment. The lender may charge you to lengthen the term which is not desirable.
You also need to structure for the best case scenario – example:
You decide to set the loan up on the longest term, but you could pay extra. You need to structure the loan to allow for additional payments, without penalty.
What are your future plans, if you are seeking to invest, or renovate which lender will not only help you now but also with your plans.
There are many decisions to make in deciding what the best home loan is – we can help you with this.
how do I pick which lender?
Once you work through what you need – 2 options will show;
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There will only be one lender who will fit all or some of what you require OR
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There will be more than one lender that will provide what you require.
If the latter takes place, the selection process will then revert to, fees, rates, banking requirements, and maybe selecting the time frame you are seeking to work towards.
what are the differences between banks and non bank lenders?
The most obvious difference is a Bank is a Bank, that is you can get other services from them like; bank accounts, eft pos cards, personal loans and so on.
There are 3 classifications of Non Banks:
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Provide full range of banking services BUT do not offer a bank branch system, internet based instead
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Provide standard competitive lending options, but not bank services, that is no eft pos cards, cheques, personal loans
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Provide non standard lending options, and do not offer bank services. These lenders are the sub prime lenders
At Think Financial Services we use a range of providers in categories 1 and 2.
what does it cost to get a loan?
There is no cost to get a loan through a Think Financial Services Advisor, as the lenders will pay our commission so you do not need to. But there are other costs associated with lending, below is a basic list, for a full description
Associated Fees.
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Loan Application Fee |
Low Equity Fee |
Low Equity Premium |
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Lenders Mortgage Insurance |
Discharge Fee |
Break Costs |
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Re Fix fee |
Re documentation fee |
Deferred Establishment Fee |
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Solicitor Fee |
Registered Valuation Fee |
Building Inspection Fee |
what is Lenders Mortgage Insurance?
When you borrow more than 80% or put in less than a 20% deposit, the lenders may charge 1 of 3 fee's. Called Low Equity Fee, Low Equity Premium, and Lenders Mortgage Insurance.
These fee's are associated to the higher risk that you loan may have due to lower levels of deposit.
The first to are charged by the lender and payable to the lender. The third Lenders Mortgage Insurance is actually another independent Insurance company that the lender pays to insure your loan or risk. The fee is actually the insurance premium the Insurance company will charge the lender. It is a one off fee, and a % of your loan amount.
do I need to get other insurances?
Lenders Mortgage Insurance does not cover you for risk but the lender, so you will need to complete your own risk assessment. Lenders can't make you take insurance but can strongly recommend and advice you do.
For further information please see our
Financial Risk Section
can I pay extra off my loan?
Yes, you can always pay extra off your loan. In some cases however you may be charged a penalty for doing this. The penalty could be either:
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Break cost, if you are paying off a fixed interest rate loan in part or full
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Early payment fee, if you are paying off the entire loan in full
When you are setting up your new loan, these are the questions that you should be covering off to ensure the best loan structure is set up for you. It may be that you have a mix of loans that allow you to pay extra payments with no penalties.
For further information please see our
Mortgages Section
how long does the process take?
In most cases the time takes 24-48 hours for a loan approval, if your loan is required to be insurance by Lenders Mortgage Insurance this may take a little longer.
The time delay is normally the time it takes you to provide the relevant information for the loan application.
Loan Application Process and
Loan Settlement Process
what information do I need for a loan application?
The information required changes from applicant to applicant. When you discuss your loan requirements with our Advisors they will provide you with a list of information required specific to you.
Loan Information Checklist.
