There are dozens of companies providing
home loans. Choose a lender on the key areas of interest rates, fees
and services. Don't be swayed by prize draws or the like. However low
fees and a contribution to your legal costs are well worth taking
You can go to the lender's office or get a mobile manager to come to you. Some let you apply online. You could approach:
The banks still provide most loans by far.
These include building societies, finance and insurance companies, trustee companies and credit unions.
Brokers deal with a number of lenders, so they can save you time
shopping around. You don't pay directly for their home loan services.
They are paid a commission by the lenders they use.
There are no specific regulations covering mortgage brokers in New Zealand. Brokers who belong to the New Zealand Mortgage Brokers Association
must operate according to the Association's code of ethics, must hold
indemnity insurance and they must use a minimum of six different
lenders. It is common for brokers to deal with far more than six
For ordinary loans, brokers are usually paid a commission of around
0.6 to 0.8 percent of the loan value by the lender. For more
complicated loans if you have a bad credit record, for example brokers
may earn up to 1 or even 2 percent of the loan value. Some lenders also
pay brokers a very small ongoing 'trail' commission on the loan.
Because brokers earn more the higher the amount of the loan, there
is an incentive for them to recommend bigger loans. Make sure you don't
borrow any more than you really need.
Content provided by sorted.org.nz, Your Indpendent Money Guide.
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