Legal and Home Buying Tips

Here are some basic answers to frequently asked questions. The answers are not always simple so you may need to talk to your mortgage broker or your lawyer.

Please click on your Question to be directed to the answer


What is a home loan?

Generally, a home loan is obtained from a lender to purchase a home. The loan is secured against the home you are buying and the lender's interests are registered on the certificate of title. This protects the lenders and in simple terms means that you can not sell your house until the loan to the lender is repaid. This is a complex legal subject and your legal adviser can explain the full legal requirements and implications of a mortgage.

What is a mortgage?

The home loan is secured by a mortgage. A mortgage is a form of security taken over real estate and land. It gives the lender the right to repossess the real estate or land if the borrower does not repay the loan. This is a complex legal subject and your legal adviser can explain the full legal requirements and implications of a mortgage.

What are the benefits of using a mortgage broker?

Mortgages are complex and there are many different types of home loans available from a large number of competitive lenders. A Whiting Financial Services Mortgage broker can help you choose a home loan that is suitable and appropriate to your personal circumstances. Whiting Financial Services Broker saves you time. They do the leg work for you. They are committed, through membership of the NZMBA, to work in your interests.


How much should I borrow?

Generally you should only borrow what you can afford. Work out if you can afford the repayments. Prepare a budget with the help of your mortgage broker before you commit to any borrowing. This will tell you how much the home loan will cost you each month or fortnight.

What home loan is suitable for me?

This depends on your individual circumstances. Your mortgage broker can discuss the options available to you from a range of home loans.

How often should I review my home loan?

It is sensible to examine your personal finances on a regular basis. You should look at the way your mortgage or home loan is managed at least once every two years. This may mean that you do nothing or you may realise that the home loan option you have chosen no longer works for you or meets your changing needs. Your Whiting Financial Services mortgage broker can help you.


Who is the mortgagee?

The mortgagee is the bank or lender. They lend principal or money which is secured against the home of the mortgagee.

Who is the mortgagor?

We only require a Guarantor in certain circumstances.  Each of our clients are personally assessed and the need for a Guarantor is based on the amount of finance you'd like to borrow and your credit profile. Business finance customers will usually require a guarantee from the Directors or Shareholders.

What is meaning of principal?

The sum you borrow. For example you want to buy a $100,000 home. You have $25,000 and you need $75000 to complete the purchase. The $75,000 will be the principal.

What is the meaning of interest?

When you borrow money you pay interest on the amount you borrow (the debt).

There are different ways interest can be paid and the method may depend on the type of home loan you have. Home loans can take their name from the way in which the interest is to be repaid. Here are some of the common types:

Fixed rate - the interest rate is fixed or set for a definite and agreed period of time, for example, from 1 year to 5 years. This means that the interest rate never changes in the period. It remains constant no matter what happens to the economy or changes in interest made by the lender.

Variable rate- the interest rate varies and changes. This means that the borrower pays the mortgage interest rate as it moves up or down based on changes in the market and economy. The mortgage rate of interest generally changes when the Reserve Bank of NZ makes changes to the Official Cash Rate.

Interest only- the borrower pays only the interest on the home loan. The principal amount is paid at the end of the loan or when the mortgage is discharged.

Capped rate - the interest rate is fixed but if the rate of interest set by the bank falls you can pay the lower rate.

Discounted rate - the amount of interest to be paid is the lenders variable rate minus a permanent discount.


How do mortgage brokers get paid?

Generally the lender pays the broker a commission for arranging the loan with the borrower. You do not have to pay the broker. If a broker charges you a fee then they will tell you before they do any work for you. All Whiting Financial Services mortgage brokers must tell you how they are being paid and the nature of the payment.

What does gross income mean?

It is income or revenue from a person or company before tax is deducted.

What is a certificate of title?

Ownership of land is detailed in registration. Registration is compulsory because it effects legal transfer of title in land. The title shows you who owns land. New purchasers register a transfer in legal tile when they complete the sale. Generally lawyers do this for you so ask them for more details.

What is the term of a loan?

It is the length of a home loan or a specific portion of the loan.

What is the settlement?

Settlement is the finalisation of payment by the new owner to the seller. It is when you get possession and the keys to your new home.


Here are some helpful tips when buying your home

  • Carefully examine all your finances. Then talk to us first about what you can afford and your best home loan options.
  • Write down the features you are looking for in a house in order of priority.
  • Check out the local papers, internet and real estate publications - look at prices, types of housing, size and location.
  • Identify the area and locations you want, consider the affordability, value, transport, schools, parks, facilities you use, your lifestyle, other charges and local rates.
  • Be flexible it will help your search.
  • Keep in touch with your Whiting Financial Services broker often.
  • Talk to your lawyer about making an offer on the property. Listen to their advice. See our Legal Tips.
  • If you think you have found a perfect property - examine the type of title to the property. Is it freehold, lease hold, unit title, cross lease?
  • Ask lots of questions about the property - what are the rates? Are there body corporate fees? Are there any restrictions, what is the annual ground rent?
  • Check the building and structural matters - arrange for a building inspection by a qualified building inspector.
  • If buying at auction - let the real estate agent know you are interested. Check out all the details of the property before auction day. Talk to us and arrange your home loan and finances in advance. Have the deposit ready for the auction day.
  • Make your offer; when it is accepted, send a copy of your written agreement to us and your lawyer.