Question 1

What is home loan pre-approval in New Zealand?

Accepted Answer

Home loan pre-approval is written confirmation from a bank or lender that, subject to certain conditions, you may borrow up to a specified amount. It is also known as a conditional approval or indicative approval. Pre-approval gives you confidence about your budget before you start house hunting and shows sellers you are a serious buyer.

Question 2

How long does mortgage pre-approval last in NZ?

Accepted Answer

Most mortgage pre-approvals in New Zealand are valid for 60 to 90 days. After this period, you will need to reapply or update your financial information. Banks may also shorten or pause pre-approvals during periods of high demand or LVR restrictions. It is important to check the expiry date on your pre-approval letter.

Question 3

What documents do I need for home loan pre-approval?

Accepted Answer

You will typically need 3 months of bank statements for all accounts, recent payslips (3 months for employed, 2 years of accounts for self-employed), valid photo ID (passport or drivers licence), KiwiSaver statement, proof of deposit, and details of any existing debts including credit cards, personal loans, and student loans.

Question 4

Does getting pre-approved affect my credit score?

Accepted Answer

Yes, applying for pre-approval involves a credit check which appears on your credit file. Multiple credit checks in a short period can negatively impact your score. This is why using a mortgage adviser is beneficial - they can submit one application to multiple lenders rather than you applying to each bank separately.

Question 5

Can I get pre-approved with a 10% deposit?

Accepted Answer

Yes, you can get pre-approved with a 10% deposit in New Zealand, though options may be limited. Banks have LVR restrictions that limit high-LVR lending (over 80% loan-to-value). First home buyers may qualify for the First Home Loan scheme with 5-10% deposit, or some banks offer 10% deposit options for new builds. A mortgage adviser can help identify which lenders accept lower deposits.

Question 6

Should I use a mortgage adviser or go direct to the bank?

Accepted Answer

A mortgage adviser offers several advantages: they shop around multiple banks with one application, they know which lenders suit your situation, they often have access to rates not publicly advertised, they handle paperwork and negotiate on your behalf, and their service is usually free (paid by the bank). Going direct limits you to that one bank's products and policies.

Question 7

What do banks look at when assessing pre-approval?

Accepted Answer

Banks assess several factors: your deposit size and source, income stability and employment history, existing debts and credit card limits, credit history and score, regular expenses and living costs, bank account conduct (no overdrafts or dishonours), and your ability to service the loan at higher test interest rates. They use a debt servicing calculation to ensure you can afford repayments.

Question 8

Can my pre-approval be declined after initial approval?

Accepted Answer

Yes, pre-approval can be withdrawn or declined at the property stage. This can happen if your financial circumstances change, you take on new debt, the property does not meet bank criteria, the valuation comes in lower than purchase price, or your employment situation changes. Keep your finances stable between pre-approval and settlement.

Home Loan Pre-Approval

First Home Loan

Key Benefits:

Key Points About Pre-Approval

What is Home Loan Pre-Approval in New Zealand?

Benefits of Pre-Approval:

Why Should First Home Buyers Use a Mortgage Adviser?

Usually Free

Saves Time & Money

Shop Around Banks

Get Best Rates

Proper Loan Structuring

Must Be Registered

7 Steps to Get Mortgage-Ready

Size Matters

Keep it Clean

Less is More

Show Some Love

Have Leftovers

Steady as She Goes

Saving for Rainy Day

Documents You'll Need

Income Verification

Bank Statements

Identification

Debt Information

Frequently Asked Questions About Pre-Approval

Related Articles

7 Steps to Get Mortgage-Ready for Your First Home

Pre-Approvals vs Live Deals: What First Home Buyers Need to Know

How Do Banks Calculate Home Loan Affordability?

Should I Use a Mortgage Adviser or Go Direct to the Bank?

Pre-Approval Documents

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