Banks and brokers - what you need to know

This article first appeared on Stuff.co.nz on 12 June 2014

Although it's considered a lifetime achievement, buying a home need not necessitate a 30-year slog when it comes to paying off your mortgage.

Ian Boyce, ASB's General Manager Business Banking and Retail Specialist Services, says finding the right financial partner for your home loan can make all the difference.

So when shopping around for a home loan provider, it is best to look at all aspects of their offering – and not be dazzled by the numbers.

Although it can be tempting to merely look at the advertised interest rate, would-be borrowers should take a close look at the lending institution's full suite of services, he says.

"In the current environment the banks are really competitive, but it's important to always look beyond the rate. Look at the long-term relationship, look at the service, look at what online capability the bank has."

Boyce says the best time to meet with a potential home loan lender is before you have even begun your search for a new abode.

"Come in early, right from the start. That way the lender can analyse your financial [history] and give guidance on how much you can afford to borrow. Knowing how much you can borrow comfortably should assist in the house hunting process."

While home loan approvals can sometimes be a drawn-out process, this is usually because the would-be borrower has failed to provide enough documentation to support their loan application, Boyce says.

He suggests bringing three to six months' worth of bank statements and some pay slips to the meeting with the lender to help speed up the process.

"We all have a duty of care to our customers and serviceability [of the loan or bridging loan] is really crucial. If you are able to provide that information it is possible to get a response to your application within one day."

Whether a first-time homeowner or a lifetime real estate investor, people of all different backgrounds use mortgage brokers. A good broker can match the customer with an appropriate lender based on the customer's individual needs, he says.

"We have been working closely with mortgage brokers since 1992. They are a great source of business for us, but more importantly they know what information they need from the customer and are able to carry out a lot of the legwork in terms of researching what offering works best for their client."

TOP TIPS

• Speak with your home lender early in the process to be comfortable in what you are borrowing.
• When choosing a potential home lender look at all the services offered by the bank – not just the rates.
• Speed up the approval process by making sure you have all the necessary paperwork showing your financial history prior to meeting with your bank.

Click here to find out more about getting a home loan with ASB.