Article provided by www.sorted.org.nz

You'll probably look at many places before you find the home you want to buy. It's a good idea to be just as careful over choosing your mortgage, since the repayments over time (interest and principal), could add up to a lot more than the cost of the home.

There are hundreds of loans you can choose from, each with its own interest rate, fees and degree of flexibility. These key features all have an impact on how much the loan will cost you and when it will be paid off. Don't be distracted by giveaways, competitions or gimmicks which don't have any effect on the loan itself.

Whether you're shopping for a first home loan or looking to change an existing loan, the first step is working out what you need. Do you get bonuses at work? Find a loan that allows lump sum repayments at no penalty. Will you need cash to renovate the kitchen or bathroom in a few years? Make sure the loan lets you re-draw money for this.

Once you've found the right type of loan think about how you can reduce the amount you need to borrow.

If you're a first home buyer, saving as big a cash deposit as you can is a good step. The Budget Calculator can help you find the money do this. If there's a particular deposit you'd like to have, the Goal machine calculator will show you how much you need to save to reach it.

You can also keep your loan amount down by negotiating hard on the purchase price of your home and finding a loan with a competitive interests and fees.

After you've worked out how much you'd like to borrow, the next question is: How much can I borrow?

For more information, visit www.sorted.org.nz

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