So, this article is here to help. We’ll discuss everything you need to know about home loans so that you can make a smart, informed decision that’ll land you in a cosy new home in Christchurch.
Keep on reading to answer the following questions:
- What is a home loan?
- How do home loans work?
- Are there different types of home loans?
- How do I get a home loan?
- How do I repay a home loan?
What Is a Home Loan?
Home loans in Christchurch are designed to help you purchase a new home. A home loan is a type of loan that is specifically meant for home buyers. They’re typically offered by banks, building societies and other financial institutions.
The lender will lend the borrower money for their new home, and the borrower will agree to repay the loan over a set period of time with interest.
The amount of money your lender provides for you is typically based on the value of the home you are purchasing. You may need to pay a deposit on your loan as well. After your loan is secured and you have paid your down payment, if required, you’ll need to repay the rest of the money over time with interest.
Are There Different Types Of Home Loans?
Not all home loans are the same in Christchurch. There are a handful of different types, and it’s very important that you know which one is most suitable for you. Some loan types are:
- Table Loans: This is the most common type of home loan in New Zealand. With a table loan, you make a fixed monthly payment that includes principal and interest. The interest rate on a table loan is usually fixed for a set period of time, such as five or ten years.
- Offset Loans. Offset loans are home loans that allow you to offset your mortgage balance against your savings. This means that the interest you pay on your mortgage will be reduced by the amount of money you have in your savings account. This is ideal for people who have a high savings balance.
- Revolving Credit Loans: Revolving credit home loans in Christchurch are loans that allow you to borrow money up to a certain limit. You then only pay interest on the amount of money you actually borrow.
- Interest-Only Loans: Interest-only loans are a type of loan where you only pay the interest on the loan amount for a set period of time. After the interest-only period, you will start repaying the principal amount of the loan as well. This is a good option if you want to keep your monthly payments low in the early years of your loan.
- Reducing Balance Loans: Reducing balance loans are a type of home loan where you repay a fixed amount of principal each month. This means that the interest you pay on your loan will decrease over time.
How Do I Get A home Loan?
You’ll need to apply to a lender to get a home loan.
However, you shouldn’t do this alone, especially if you don’t have experience with home loans in Christchurch! The best thing you can do for your situation is to find a fantastic home loan specialist.
A mortgage expert (i.e.; a mortgage adviser) will look at your circumstances, speak to you about your needs and help you find the most suitable lender for you. Applying for a home loan is a very important decision; you can use all the help you can get!
If you’re a first home buyer, it’s vital that you get help from an experienced Christchurch mortgage broker.
How Do I Repay A Home Loan?
As a borrower, one of the biggest questions on your mind is probably, ‘How do I repay my loan?’
You will repay your home loan over a while, usually around twenty-five or thirty years. Your monthly payment size will depend on the size of the loan, the interest rate, the length of the loan term and the type of loan you selected.
This may all sound confusing, but luckily, there are easy-to-use online tools you can use to give you an idea of how much you’ll be paying back. Check out our online loan calculator for estimates of how much you’ll need to pay.
Start Your Life As A Homeowner Right
Buying a home is a huge decision that can really benefit your life down the track. One mistake here can result in frustrating issues. No worries, I’m here to help!
Call Canterbury Home Loans to boost your chances of landing your dream home. You can visit my contact page to book a phone appointment, message me or call me directly at 0224 306012 if you need me urgently.
Canterbury Home Loans – find a home loan that works for you.