The strongest way to get the best deal on your loan is to research the different types of loans that are available, think about what you need, and then compare these to see which one is most suitable for you.
New Zealand’s current median price of a property is $680,000, which means a lender will require a mortgage of at least $456,000.
The best type of loan for you will also depend on what you require it for and how much money you currently have. For example, if you are looking for a large amount of money to buy a car, then it would be better to take out a personal loan or an unsecured loan. If, however, all you require is something small, like $500, then it would be better to apply for a credit card instead.
For the purposes of this article, though, let’s focus on home loans.
Ways to negotiate a better loan rate
1. Compare loan rates from a variety of lenders
With so many lenders available in New Zealand, it’s difficult to find the best deal on a loan. In order to find the best one, you should compare rates from a wide variety of lenders before signing. For example; ANZ offers a one-year fixed rate special at 3.45%, whereas HSBC New Zealand can do slightly better with 3.29% p.a.
2. Request that a bank or lender match any other loan offers
If you’re shopping for a new mortgage and want to make sure that you’re getting the best deal possible, there are a few things that you can do in order to ensure that this happens.
After you get your pre-approval letter and contact a lender, ask them to match other mortgage offers to get the best deal on your loan.
It’s always worth asking your mortgage broker if they can match you with other offers. If they don’t do it automatically, you should mention it upfront before making any commitment.
3. Establish a credit card history and a good credit score
Payment history and credit record are two of the most important factors when it comes to your credit score. It is essential to make on-time payments and to avoid any late charges, which will show up on your report. You can also try not using more than 30% of your available credit card limit and maintain a low balance.
4. Increase your down payment
A down payment is a sum of money that you pay at the time you purchase a home in order to secure the loan for buying it. The goal of paying a down payment is to show that you can afford the mortgage payments and have enough money for other expenses related to owning a home.
The larger your down payment, the lower your monthly mortgage payments will be and the less interest you’ll have to pay in total. In other words, when you put more money upfront at closing, you’ll be able to save more overtime on your mortgage.
Due to reintroduced lending limits in the country this year, most owner-occupiers will require a 20% deposit, while investors would need a 40% deposit. The Reserve Bank of New Zealand has issued these new guidelines in response to the country’s skyrocketing housing prices.
New Zealand lenders are looking for distinct qualities in people who are interested in getting a loan. The first thing they’ll likely look at is your credit score. If you have a low one, it may be difficult to get the best loan possible. The second thing they look at is your down payment, and you can increase it by saving or even getting a side job to pay off the balance faster.
At Quick Loans, we can get money credited to you in less than 60 minutes, with no paperwork involved — you can do it all online.
Contact us here and let’s see how we can help.