SOME COSTS DIRECTLY RELATED WITH THE MORTGAGE – ESPECIALLY WHEN PURCHASING A PROPERTY

SOLICITOR – $750 TO $ 1,000 OR EVEN MORE

• TITLE CHECK, LIM REPORT CHECK
• MORTGAGE DOCUMENTATION, TITLE REGISTRATION,ETC
• EXTRA COSTS DEPENDING ON OTHER WORK

LIM REPORT – $ 300 APPROXIMATELY-

• DETAILS OF PLANS SANCTIONED
• PROPERTY HISTORY, FLOODING RISKS, ILLEGALLY ERECTED STRUCTURES, SOIL CONTAMINATION, COVENANTS,ETC

RVR – $450 – $600- DEPENDING ON SIZE OF PROPERTY

• RV REQUIREMENT DEPENDS ON LENDER.
• REQUIRED WITH PRIVATE TREATY – ALSO DEPENDS ON LENDER, PP AND CV

BUILDING INSPECTION $ 350 TO $500-PEACE OF MIND

• TRUST FORMATION – $ 1500 ONWARDS
• DISCUSS WITH YOUR SOLICITOR

LTC – $300 ONWARDS

• THROUGH AN ACCOUNTANT OR SOLICITOR
• YOU CAN FORM IT ONLINE YOURSELF-RENTAL PROPERTY BENEFITS

LOW EQUITY FEE/MARGIN

• DEPENDENT ON LVR – NIL FOR LVR BELOW 80%
• CAN BE NIL UP TO 85% LVER AT TIMES
• IS EITHER A FEE OR A MARGIN ON THE INTEREST RATE

APPLICATION FEES_-CAN BE NEGOTIATED MOST OF THE TIME TO NIL

AFTER THE MORTGAGE

• HOME INSURANCE – $40 ONWARDS
• CONTENTS INSURANCE – YOUR CHOICE

WATER RATES – DEPENDING ON USAGE -$100 PER MONTH ON AVERAGE, CAN BE MORE DEPENDING ON FAMILY SIZE

• COUNCIL RATES
• ARC CHARGES (BETWEEN $200 – $300PER ANNUM FOR AUCKLANDERS)

LOAN REPAYMENTS

• LIFE INSURANCE/TRAUMA/DISABILITY
• MORTGAGE PROTECTION INSURANCE
• HEALTH/MEDICAL INSURANCE
• INCOME PROTECTION INSURANCE
• REDUNDANCY INSURANCE

preparing for the unexpected

3 THINGS TO BE AWARE OF WHEN TAKING ON A MORTGAGE:

1)  LOAN IS APPROVED UNDER A SET OF CIRCUMSTANCES…INCLUDING INCOMES ( JOINT OR INDIVIDUAL INCOMES)…LOT OF APPLICATIONS RELY ON ONE OR MORE OF THE APPLICANT WORKING MORE THAN 1 JOB TO SERVICE THE LOAN…WHAT WILL HAPPEN TO LOAN REPAYMENTS IF 1 INCOME IS LOST OR JOBS ARE LOST IN AN UNEXPECTED SITUATION? PREPARE FOR THESE SITUATIONS BY NOT BORROWING TO THEMAXIMUM AND ALSOPROVIDING FOR A LITTLE BIT OF EXTRA REPAYMENTS WHEN THE LOAN REPAYMENTS START…THIS WAY YOU CAN REQUEST THE LENDER TO RESTRUCTURE THE LOAN AND SCALE BACK REPAYMENTS.

2)  PROPERTY PRICES WIL CHANGE WITH TIME…YOU WILL EXPERIENCE PRICE SWINGS IN BOTH DIRECTIONS….DO NOT BE DISTURBED BY DOWNWARD SWINGS IN PRICES….ENSURE YOU BUY AT THE APPROPRIATE PRICE…THERE IS NO FOOLPROOF METHOD TO ENSURE THIS…YOU HAVE TO DO YOUR HOMEWORK BEFORE BUYING AND MAKING YOUR OFFER.

3)  LOAN REPAYMENTS ARE BASED ON CURRENT INTEREST RATES AND WILL CHANGE WITH TIME. BE PREPARED FOR HIGHER REPAYMENTS WHEN INTEREST RATES INCREASE. ONE WAY OF PREPARING IS TO TRYAND START MAKING REPAYMENTS AT HIGHER INTEREST RATE LEVELS IF THE FAMILY BUDGET ALLOWS YOU TO. THIS WAY YOU ARE NOT TOO MUCH BOTHERED WHEN AN INTEREST RATE HIKE INCREASES YOUR REPAYMENT.

IF YOU ARE NOT PREPARED FOR EVEN ONE OF THE ABOVE THREE, TAKING A MORTGAGE IS NOT AN OPTION YOU SHOULD SERIOUSLY CONSIDER.