[maracuja]

hi there. I have a question about how it would work to obtain a mortgage in NZ while still overseas. Has anyone done this?

I'm thinking that it would be easier for me to get a mortgage while I'm still in the USA and earning a higher salary. I'll be in NZ next month, and if I find a place that seems suitable, I think I'd try to buy it.

How would the payments work since I'd still be in the USA? Would I need to set up a bank account in NZ to make the mortgage payments and to have the money for the deposit?

Thanks for any info anyone has on this!

[constablechuck]

You may have difficulty getting a mortgage in NZ when you live and work in the U.S., it may be possible if you had a substantial deposit, you could try contacting a mortgage broker in NZ and see what they say.

The other thing is that the interest rates are much higher in NZ so you won't build equity very quickly and the rent you get from the property will probably not cover the mortgage payments, not to mention the rates (property taxes), maintenance and management fees, if you get some bad tenants that don't pay the rent or damage your property then your really in trouble ie: cost of repairs and legal fees.

My advice is wait until you move here to buy property, in my opinion the housing market here has hit it's peak and the prices may go down in the next few years, it's not hard to find a rental and that gives you time to look for the house you want.

You could open a bank account here, some banks have regular savings accounts that pay 8% interest and as a non resident you get taxed on your interest at a much lower rate than those that live here, save your U.S. Dollars and send them to your NZ account whenever the exchange rate is good, by the time your ready to move here you could have a nice nest egg to put towards a house.

[maracuja]

thanks Constable for your reply.

I'll keep your advice in mind & will keep thinking about it. I did contact a mortgage broker and they were actually very encouraging.

My concern with waiting until I get to NZ is that my salary there will be substantially less, especially since I'm planning to first do a year of study before working. I think it'll be a lot harder to qualify for a mortgage if I wait, whereas if I have the mortgage in place, I'll be able to budget ahead of time and know what my payments will be for my first few years in NZ.

[Jo Jo]

I've done it and it was really, really easy. I bought a house earlier this year and am moving to NZ and into the house in a fortnight.

I applied for a mortgage from the UK. The reason I did it was that I knew I was moving to NZ in September/ October, but was worried I wouldn't be able to get a mortgage in NZ for a while as I will be self-employed, so decided to buy while I could easily get a mortgage.

I used an Independent Financial Advisor in NZ to find the most suitable mortgage for me, and had to send copies of my bank statements, payslips and ID in order to get the mortgage. I communicated with my IFA and solicitor using email and by scanning documents.

I transferred the deposit from the UK to my solicitor in NZ (via a foreign exchange company), and then the mortgage payments are taken from my NZ bank account every fortnight.

When I bought the house it had a tenant and we hoped she would stay in the house until we moved over, but she actually moved out several months ago so we have been paying the mortgage ourselves. But to be honest that hasn't been too much of a financial strain as we weren't dependent on renting the house out to be able to afford it.

Hope that helps.

Jo Jo

[maracuja]

thanks very much Jo Jo!

your experience sounds very much like what I'm trying to do, and "really, really easy" sounds great!

Good luck with your move and with settling into the house.