Wait, what? The device I use to make calls, and who am I kidding, occasionally selfies, is going to help me save for my first home?
It might sound a bit hard to believe, but the truth is that today’s technology is helping New Zealanders every day when it comes to manage finance.
But, how? Do you remember the days where you needed to go into the bank to transfer funds from one account to the next? Or perhaps a time when you needed to go in to open up a new savings account? Through the use of online banking, we are able to use our mobile phones to access banking platforms as well as a number of super handy apps that assist in house hunting!
Rename your account to something motivating
You’re standing in a store and there is this big screen smart TV just glaring at you, screaming “buy me, buy me!” The thing is you don’t have enough money to buy it cash, but on the other hand, you have been putting away quite a sum of money each month into your savings account. Thus, you can get cash. So, you log into your online banking through an app on your smartphone, you scan the accounts and you find the account, except it’s called “Your Future”. Now we don’t need rocket science to figure out how that name might impact our decision to withdraw from the account versus one that might have simply been named “savings”. Pretty “smart” right? You’re welcome.
Let your phone help you determine your instalment with the help of a home loan calculator
More tech and it doesn’t even end here. First-time homeowners in New Zealand aren’t even seen as pessimistic anymore for saying out loud that no one can afford a home loan deposit at 20%. Where there were once encouraging words to persevere, now all that folks are doing is nodding silently in agreement.
It’s quite sad, but it’s a daunting reality. The thing is, it can’t be an accepted one. There has to be a way in which first-time homeowners can afford to buy their dream home, or at the very least, walk away with a consolation prize of a home at all! When it comes to money goals (in fact, any goals), it is much easier to navigate your way if you have a destination in mind. A few proverbial phrases later, you’ll know how much more money you need each month for your mortgage loan if you know how much you need which will guide you on how to achieve your home loan deposit goals.
When you visit a website that has an online home loan calculator, you might need to offer up a few personal details, including your income, expenses and a few other things to assist in providing you with an instalment amount and total repayment over the mortgage period. Your borrowing power is what will determine if you are able to buy that first home in your current financial status or if you still have a bit of work to do before affording the home loan you need. Remember though, that they’re all benchmark figures, the true figure to the dollar can only be approved at a bank or lending institution.
How does conditional approval work?
Online banking apps also allow individuals to take the house hunting venture another step. Through the use of an online form, you can easily apply for conditional approval for a home loan. Planning to buy the house with someone else? In that case, they, too, need to avail themselves in the application process, including affordability and credit checks.
The application calls for a few documents to get the paperwork side complete, and these include your annual income and commission (if you’re a commission earner), a list of debts and expenses, and lastly any property details for the property purchase.
Don’t forget that establishment fees are necessary for applications for conditional approval. Another thing to consider is the higher interest rates that are enforced when loans that are accepted do not meet the standard lending criteria.
Be assertive & track your spend
Renaming your bank account might be a neat trick to fool your inner shopper to relax and rethink, however, there are far more advanced ways, such as budget tracking apps that can just as easily control you and your spending. CashNav is a good example. It helps you stay on top of all your spending. If you have any bad habits, this app is going to highlight them. It measures your spending habits through the month.
It also has a few really quirky features that keep you motivated to check it and use it, such as the background color changing if you’re overspending versus underspending. The app has smart technology that allows the user to split purchases into wants and needs, which shows you at the end of the month whether you’re spending your money more on your inner desires, or based on basic survival! You can see a daily summary, you can compare previous days, it really is a handy tool and highly recommended to all Kiwi’s out there trying to regain control of their spending habits.
With these few tricks and you, dearest smartphone, you can very easily and conveniently save for your first home!