Any long term contractors or freelancers here that have a mortgage? Did you use a broker or go directly with a bank?
Not a contractor or freelancer, but go with a broker first.
(9/10 you already know the banks offer at face value and if they were intent on giving away their money to you, they would have door knocked you by now).
Contractor over here. Was able to get a mortgage with 10% using a broker. They essentially vouch for you with the bank.
PM me if you're in Auckland and want the name of the broker.
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No joy getting a mortgage with a bank, but did get one through Sovereign.
I had a mortgage broker doing all of the ringing around, so was a pretty simple process.
I'm a contractor and have 18mths ago got a mortgage. I used Sonya Reid and so has my daughter recently. Silly not to use a broker, they do all the work for you and take away the stress.
Sonya is brilliant, 100% from 108 reviews https://www.trademe.co.nz/services/other-services/financial-legal/auction-358325634.htm?rsqid=1539ed09369445198e047443022959fe
I've done both and had no issues.. It all depends on the mood of the bank, your overall financial situation and the nature of your contract. If you are in IT project contracting with a long term contract it's a lot easier than true freelancing where you are hustling for work (banks don't like that much without a long history of revenue). If you're borrowing 2x income with 50% equity vs 7x at 10% they'll look at you differently. Same if you have a partner in full time employment or income from another reliable source.
Overall they're looking at any risk of your income not being there to service the mortgage. A broker will definitely help you present your situation in the best light, and they'll know which lenders are being strict on any given day.
Thanks for the replies.
I'm looking in Wellington and will check out a couple of the brokers mentioned. Anyone who has used a broker recently know what fees to expect? Do you pay a lump sum % after closing?
When using a Mortgage Broker you don't pay a fee, actually they'll make sure you get some nice credits, mainly enough to pay the lawyers bill.
We have switched to Kiwibank and found they had no particular issues with me as a contractor. They wanted last 3 years financial statements from my business and we were good to go.
However our mortgages have been only around 20% of the equity... not sure what they would be like at 80 or 90%.
Don't be afraid of going direct as well. Eg I don't think BNZ work with brokers. Ask for discounted interest rates and legal fees covered. You don't need a broker for those things, just ask. Then compare with what the broker puts on the table. Get referred from an existing customer and get $ too. Eg if I referred you from my Westpac we both get $250. PM if you want details around what package they offered me (discounts and lawyer costs etc).
Agree with the not discounting going direct. Also understand what banks etc the broker does and does not work with. For example, as a contractor I went direct to Kiwibank as they would deal with me just fine (needed financials and had previous relationship with them). When I tried brokers they wouldn't/couldn't deal with Kiwibank, and going direct to KB at the time was a better deal than what the brokers I talked with could do with anyone else.