Owning a home is the most coveted of all dreams for any individual no matter what country a person is in. UK, India and China are some of the top countries whose residents migrate to New Zealand, making the nation’s population rise in the last few years. For an individual, if the requirements of the New Zealand government to work or live as a skilled migrant are met, then there are numerous government and private banks that are keen to grant a mortgage.
Banks’ procedure for vetting mortgage applications
For vetting a mortgage application, there are several steps that banks take while deciding to grant a home loan or not. Banks go through the applicant’s credit history and the credit score. The income, expenditure, savings as well as the investment details of an individual are also scanned to assess the financial state of a person. Background checks pertaining to active debts from other banks or other financial institutions are also taken into account. The income of an individual determines the amount of loan that the individual is eligible for.
Once the individual’s financial details are scrutinized, second comes the checking of the property that is in question. Banks check the worth and other details of the prospective property for which loan is being sought by an individual.
After the loan application is duly filled and all the checks are in place, the application is sent to a second specialized round of checking. This step is to look for any errors, deliberate discrepancies, misinformation and hidden flaws in the application.
The income of an individual is doubly scrutinized by cross-checking the income and taxation details with the individual’s employer. Also, courts and lawyers are contacted to check for any monetary liability that a married or a divorced person may have.
Banks assess mortgage applications and the subsequent mortgage limit by dividing the applicants into three broad categories.
- Permanent residents – Banks and all other financial institutions treat all permanent residents like any other New Zealand citizen and home mortgage of up to 95% are available to such people. These include natives as well as immigrants who have obtained permanent residency.
- Individual’s on work permit – People who are not permanent citizens but are on a work permit are required to pay anywhere between 20%-50% of the mortgage amount. Background checks for such people are more stringent than those who are permanent residents.
- Temporary visitors – Such individuals are treated differently by different banks and financial institutions. Some may treat such people similar to the ones on work permit whereas other banks may not be interested at all in lending to such temporary residents.
The higher the amount of loan disbursed, the greater is the expected income of an individual. The kind of mortgages that are available to an immigrant vary according to rate, fees and flexibility.
Depending on the rate, two kinds of mortgages are available namely, fixed, floating or a mix of both. Based on the repayment structure, loans can be classified as Table Loan or Revolving Credit loan.
With a plethora of home mortgages available for immigrants, choosing the most suitable mortgage looks like a difficult task but is actually not so. Once you have your income and expenditure sorted and have a property that you find promising, procuring a loan is not difficult at all. On the contrary, there are several financial institutions which have eased the process to an extent where all the formalities can be successfully completed from within the confines of your home or workplace.