New Zealand: Mortgages

New Zealand lending criteria

Do I qualify for a New Zealand mortgage?

To qualify for a mortgage in New Zealand, a calculation is used to establish whether you can afford to maintain the mortgage repayments. This will automatically happen when you complete the application form, and Conti won’t charge you for this service.

How much can I borrow?

• Calculation based on the valuation or purchase price, whichever is the lower

• Up to 70% of LTV available for house purchase, remortgage or home improvements

• Based on joint net pay, where joint income is applicable

• Existing liabilities, e.g. mortgage or rental payments, loans, credit card payments and maintenance are taken into account, together with the proposed New Zealand mortgage payments. All this must not exceed 35% of your monthly net income.

What evidence of income do I need?

If you are employed:
• Your last three month’s payslips
• Your latest P60 or Employers Reference
• Your last six month’s personal bank statements

If you are self-employed:
• Your last two year’s audited accounts
• Your last 12 month’s business bank statements
• Your last six month’s personal bank statements.

Example mortgage payments

If, for example, your net joint monthly income is £2,500, 35% of this equates to £875. If your only liability is your mortgage payment, of say £300, this would leave a balance of £575 for your New Zealand mortgage repayment

What types of New Zealand mortgages are available?
For our latest rates and to see the different types of New Zealand mortgages on offer, please visit our website or speak to one of our advisers.

• Loans available in up to 70% of the property’s value in New Zealand Dollars only
• The maximum term of any mortgage is 30 years, this varies on the type of loan
• Repayment mortgages available
• The minimum loan you can take out is £50,000

Essential information for buying properties in New Zealand

Buying property abroad is not necessarily the same as buying in the UK, there is other essential information you need to be aware of both before and during your property purchase.

• It is of paramount importance to seek independent advice from an overseas solicitor.

• You need to ensure that you will have full title to the property on completion and that you have the appropriate documents available for the lender.

• It is essential that you take appropriate independent legal advice before making an offer on a property, as this is done in writing and once it is signed it is legally binding.

• You should check with the estate agent and/or your lawyer that you are aware of the costs charged by legal and Government authorities for buying a New Zealand property. The lender will also have their own legal costs for assigning the loan, the cost of which they will normally advise you when they issue the mortgage offer. These associated fees/taxes are typically between 10% - 15% of the properties purchase price.

• Please be aware that the solicitor or notary may be incorporating costs for assigning the mortgage within his charges, and you should establish the actual cost before proceeding with a loan application.

• Note that a ‘Power of Attorney’ may be required by the lender (resident in New Zealand), and we also advise you to make the necessary arrangements etc.

• Properties can be purchased in the following entities.

Individually or in joint names
In a New Zealand Family Trust name
In a New Zealand Limited Company name

© Conti Financial Services Limited 2008

This article is reproduced with the kind permission of Conti Financial Services Limited.

For information and advice on overseas mortgages and residential finance in over 30 countries, contact Conti Financial Services Ltd on www.mortgagesoverseas.com