FISCUS MORTGAGES - INFORMATION AND ADVICE

Mortgages & Property in New Zealand

Guidance notes for purchasing a property in New Zealand.

1) Please ensure that you will have full title to the property on completion and that the appropriate documents are available for the lender.

2) With new properties, find out the date the property will be registered in your name(s), as the lender cannot lend on the security of the property until it has been registered.

3) Whilst all reasonable steps will be taken to secure the loan on your overseas property as soon as possible, delays may occur due to the New Zealand legal and administration system.

4) Check with the estate agent/lawyer that you are aware of the costs charged by the legal & government authorities for purchasing a New Zealand property, noting that the lender will have their own legal costs for assigning the loan (the cost of which they will normally advise when they issue the mortgage offer).

5) It is essential that you take the appropriate independent legal advice before signing the sales contract or paying a deposit, if purchasing a foreign property, as would be expected if you were purchasing in your own country. The bank will require a copy of this document to be forwarded with the relevant application form. However you are able to sign this contract with the clause “subject to mortgage finance” as the contract, once signed is legally binding.

6) Please also 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.

7) Please be aware that the Lawyer/Notary may be incorporating within his charges, costs for assigning the mortgage and you should establish with the Lawyer/Notary the actual cost before proceeding with a loan application.

8) It is advisable to arrange your mortgage finance before agreeing to purchase a property.

9) A New Zealand bank account will be required.

10) Loans are offered in New Zealand Dollars or Sterling

11) All mortgages should have a suitable life assurance policy assigned to them. It is not mandatory but strongly advisable.

12) Properties can be purchased either individually or in joint names

How much can I borrow & what proof of income is required?

Please note, that there are no non-status/self-certification mortgage facilities available in New Zealand (although renting out your property is permitted), all loans need to be supported by a minimum requirement of proof of income, i.e. if employed - copies of your last three month's payslips & copies of your latest P60/Employer’s Reference together with copies of your last 6 month’s Personal Bank Statements will be required or alternatively if you are self-employed - copies of your last two years Audited Accounts & copies of both your last 12 month's Business and last 6 month’s Personal Bank Statements will be required on application.

Unfortunately in New Zealand the New Zealand Lenders will NOT take into consideration any proposed Rental Income from the property for mortgage purposes/repayments.

Your loan is based on your joint net “take home” pay and is calculated on an affordability basis. All your existing liabilities including any mortgage/rent payments, personal and bank loans and any maintenance (ie: Divorce) payments together with your proposed New Zealand mortgage payments must not exceed 35% of your net monthly income.

Example:

Net joint monthly income £ 2,500 times 35% of that figure is £ 875 minus existing monthly mortgage payment £ 300 – No other liabilities. This leaves a balance of £575 for a proposed New Zealand Mortgage payment.

Stage Payment Funding In New Zealand ?

Please note, that if the property is to be constructed and stage payments are to be required, the land must be purchased from you own funds and also registered in your own name’s – not the Builder/Developer’s – in order for the proposed Lender to obtain a legal charge against this and also to enable them to secure funds against it. Without this legal registration the Lender will not release any funds until the property is fully constructed and registered (which will mean upon completion of the total building works).

Alternatively if this is not possible, when the property is fully constructed the Builder/Developer’s must provide the Lender with the 'Certificate of Final Construction', thus enabling the Lender to take a charge against it and release the required amount of funds.