Can I still borrow as much?

For those of you who are thinking about buying, here is some information.

You will be well aware that the economy is suffering the effects of the Virus, with some industries suffering more than others.

Banks are now prepared to lend over 80% more readily than before, but here are the things that really concern them and hence the amount they will lend to you.

No 1

What industry are you in? Regrettably, there are very few sectors that haven’t suffered, but if you are an employee of the NZ Government such as; a Teacher, Nurse, or in the Armed Forces then you will probably be the least affected, at least money-wise.

No 2

Are you still on the same level of pay as you were in say February 2020? A lot of people have had pay cuts and this is where the bank will look first. If you have had a pay cut of say 20-30% then as you may expect this means the bank will lend you less.

Banks are taking a very keen interest in your last bank statement and payslip to see how much you have been affected.

So what to do?

Well if you can buy on your revised level of pay and you feel comfortable being responsible for the mortgage, then fine. You must be very sure as to the stability of your job or business and should cover off problems such as; if I get made redundant then what, or if I am too ill to work then what.

If your pre-approval loan offer from the bank is less than you need or would like then I’m afraid you may just have to wait a while.