Three Mortgage Myths Which Shouldn't Stop You Buying
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Why do people think a 20% deposit is required to buy a home?
Hey team, it's Frances. Look, there are enough things holding you back on that home buying journey without worrying about mortgage rules that actually don't apply anymore. So I gave a super quick rundown to the TVNZ Breakfast team of the mortgage myths that could be holding you back when you could actually full steam ahead. They were kind enough to say I could put that here for you too, so enjoy.
Let's talk about mortgages and the big myths that people fall for. I mean, it's a massive decision, right? And you're actually thinking, can I commit to this? And there's all this background noise and these myths that people are telling you about why you can't do it. So let's bring that can-do attitude. Why can people do it? What are these myths we need to dispel?
Exactly, I'm taking a break from being the bad news fairy and I'm trying something a little new of being nice.
Can you buy a house with a 5‑10% deposit and still get approved?
Solutions focused.
Working on it. Because yeah, here's the thing is buying a house is hard enough. It feels like a huge mountain to climb. And even though prices have been down a little bit and flattening out, it's still a huge deposit. So I think one of the big things to start with is people look at this idea, they get told it's a 20% deposit to buy a house. And it's gonna be in a lot of areas, 100,000, maybe $200,000. It does not have to start with a 20% deposit. There's a lot of people out there who could pay back the mortgage if they had a smaller deposit, so you can often start with a 5% if you get approved for something like a first home loan, or you can talk to your bank or mortgage broker about a 10% deposit, because banks actually have a certain amount of their borrowing that they can lend to people with low deposits.
Currently, they are not filling that, so a lot of banks will be friendlier on this than you think.
For a long time, there's been a feeling, probably justifiably so, that you can't do it alone. You need someone to do it with you, whether it's a family member or a partner or something like that.
Do you need a partner or family member to purchase a home together?
Is that still the case?
A lot of people feel like you need to be in that marriage relationship before you do this. And yes, you want to make sure that you're really rock solid with whoever you go into buying a house with. Certainly doesn't have to be a romantic relationship. There's a lot of people buying with siblings, a lot of people buying with parents. And I think the big thing is, marriages can break up anytime. I think what you really want to think about, whoever you're looking at buying a house with, it can of course help to split the bills. You just want to be able to go to a lawyer. You want to be able to have tricky conversations. You want to talk about what happens in worst case scenarios, and you want to be comfortable sharing your full financial picture with them.
If you're not comfortable having those worst case scenarios and you're not comfortable sharing all your financial info, that's a red flag that maybe you shouldn't.
Will my everyday spending (like Uber Eats) stop me from getting a mortgage?
What about sharing your financial information with the bank? You're like, I don't want them to do an audit of what I've been spending my money on. You can see Sky Television, you can see Uber Eats, you can see the coffees. Don't look at it. Is that something that actually you're just going to have to get over?
Yeah. Well, see, this is one of those used to be true, not true anymore. So we love this change. What's known as the triple CFA, when that came through, it made things really, really tough and your bank was Absolutely a judgy parent they would go through. They hated the Uber Eats, eh? Hated it.
What should first‑time buyers do to overcome mortgage myths?
Hated it. Anything that was, you know,
irresponsible
spending. Exactly. That's all changed. So for the last couple of years, they haven't been looking at that. This idea of three months of clean spending. You don't have to worry about that. What you do have to worry about is things like gambling, things like debts. Not your Uber Eats.
Okay. Is there some advice that you would give people that are kind of falling for all these myths all the time? What would be the one thing you would say to them about, actually, you can go and do it?
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Chapters
6 chapters
1
Why do people think a 20% deposit is required to buy a home?
0:02–0:52
2
Can you buy a house with a 5‑10% deposit and still get approved?
0:52–1:57
3
Do you need a partner or family member to purchase a home together?
1:57–2:40
4
Will my everyday spending (like Uber Eats) stop me from getting a mortgage?
2:40–3:09
5
What should first‑time buyers do to overcome mortgage myths?
3:09–3:36
6
How can a mortgage advisor help you secure a loan faster?
3:36–4:29
Speakers
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