What does a mortgage advisor actually do? (+ why it could save you thousands)

If you’ve ever wondered what a mortgage advisor really does and whether you need one, you’re not alone!

When you’re new to the mortgage game, the concept of a mortgage advisor probably seems a bit foreign or mysterious, just like the rest of the process!

Here’s the thing; a good mortgage advisor is a bit like having a personal guide through the home loan journey, someone that’s on your team, advocating for you, demystifying the jargon and supporting you every step along the way.

Sounds pretty good, right? Let’s break it down to help you make a decision that’s right for you before you proceed.

We work for you, not the bank.

If you choose to go directly to the bank for a home loan, you’re limited to what that one bank offers. Mortgage advisors have the benefit of working with multiple lenders, acting as the go-between to compare options to find one that suits you and your situation perfectly.

We ask you all the questions, learn about your goals, and match you with the most suitable lender.

We handle the paperwork and negotiating.

Let’s be honest, applying for a mortgage can feel like navigating a whole new world; with so many new terms and processes and SO MUCH PAPERWORK. We can take that all off your plate because we get mortgages every day of the week - it’s our speciality!

We help you gather all your financial info, advise you on how to improve your application, package it up and present it in the best possible light to the banks, then staying with you through the whole process; advocating for you and supporting you.

If something’s not quite right for the bank, we’ll look for ways to overcome any issues to keep you on track to your goal.

We can save you time and stress.

Getting a mortgage usually comes with a whole lot of admin - calling around and contacting different banks, filling out all the paperwork - it can be like a full time job to get it right! Having a broker saves hours of admin and all the stress of having to navigate the process on your own!

We can help you understand your numbers so you know that you’re making the right choice for your circumstances and your future.

A good broker doesn’t just aim to get you a mortgage no matter what - we take a holistic look at your circumstances, your short term goals, your long term goals, and weigh all of it up to help you get a loan that actually works with your lifestyle. We want to help you see things clearly and truly understand the numbers, so you can make realistic, educated decisions and be confident that you’re moving in the right direction.

We’re with you for the long haul.

Here at CLAY, our relationship doesn’t end as soon as you get your mortgage.

We’re with you all the way, making sure you’re always getting the best rates, and helping you plan for the next big step; whether that’s assisting you to restructure your loan, to buy an investment property or a holiday home, or if you want to figure out how to pay off your loan faster. Life changes, and we’ll be here for it!

We don’t cost a thing.

In New Zealand, mortgage brokers are paid a commission by the lender when your loan goes through. That means you get all the support and advice at no cost to you. And because we’re not tied to any one bank, all our advice is independent and unbiased - we genuinely want what’s best for you!

Still not sure if you need an advisor?

Let’s chat! We can talk through where you’re at to help you make a decision and also to decide whether CLAY is the right fit for you. You can get in touch with our team here for a no obligation chat!

What do the banks really look at when you’re getting a mortgage?

So, you want to get a mortgage! Maybe you’ve found the house of your dreams, you want to expand your property portfolio, you’re over renting, or you just want to investigate exactly how far away you are from taking that first step onto the property ladder…and want to know what you need to get you there?

I totally get that it can feel pretty daunting, or even scary to start the process of getting a mortgage, as it feels pretty vulnerable to let the banks all up in your business with a fine-toothed comb. A lot of people dread the idea of them judging you and potentially disqualifying you for that Wednesday night Uber Eats transaction, or the time you got a little too jolly in the Boxing Day sales. The truth is, it’s nowhere near as scary as it seems, and ultimately, once you know what you’re working with, the better informed you are to make any changes that can get you where you need to be.

So, here’s a clear, no-BS breakdown of what banks really look at when assessing you for a mortgage. It’s more than just how much you earn and how much you spend - it’s a holistic view of how risky or reliable you appear as a borrower.

Here’s what we’re working with:

1. Your Income

   The banks want to ensure that your income is consistent (that you have money coming in regularly and that it’s from a stable source), that you can verify it’s source and that it’s enough to cover your mortgage, as well as your other regular living costs.

   If you’re self-employed, you’ll need at least two years of financial statements, and that banks will probably be a bit more conversative when assessing you - you can read more about getting a mortgage when you’re self-employed here.

2. Your Employment

   The bank will be interested to know if you’ve been in your job 6-12 months or more, that you have a consistent pay rate and that you haven’t changed industries recently, or often.

3. Your Expenses

   This part can feel a little bit scary for a lot of people (it’s not just you, don’t worry!), but the bank understands you have costs, and they’ve seen it all before - they’re just doing their best to understand if you’re in the position to potentially service a mortgage.

   They’ll want to know what your day to day living costs are (like food, petrol, utilities etc), what existing debt you have (including things like Afterpay!), what your credit card limits are, as well as subscriptions, school fees, and all your other everyday costs.

   They will likely ask for three months worth of bank statements to get a good overview of your spending.

4. Your Deposit

   Of course, the banks will be interested in how much you’re able to bring to the table; including how much you’re able to contribute upfront and where it has come from.

   It might be possible to secure a mortgage with a deposit lower than 20%, but you can read more about what that might involve here.

5. Your Credit History

   The bank wants to know how trustworthy you are to ensure they can safely lend to you, so they’ll want a snapshot of whether you pay your bills on time, if you are prone to late payments or if you have defaulted on loans before.

   Showing how responsible you are here means you’ll be viewed as low risk for missing a mortgage payment, and that’s what the bank likes to see!

6. Your Debt-to-Income Ratio

   With all the information now to hand, the bank will be able to get an understanding of how much debt you have compared to how much income you have to ensure you’re not stretching beyond what you’re capable of servicing.

7. Your Character

   With all of the above information, the banks will be able to get a clear picture of who you are when it comes to money. Whether you’re unpredictable with spending, or if you’re strict with your budgets; if you slip into overdraft often, or if you never miss a bill. This will give them a holistic view that will assist them to make a decision on your lending.

8. The Property

   The banks will also consider the property you’re hoping to buy; whether they think it is worth the price, if it will hold its value, and whether they will easily be able to recoup their costs on the property if anything goes wrong.

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Ultimately, the banks want to make a smart decision when they lend to you - so yes, the savvier you are at budgeting and saving and the less spending slip ups you have the better!

Working with a mortgage advisor helps you to put your best foot forward to the banks, and allows you to have someone else cast an eye over your situation, and guide you to make improvements where necessary before you go all the way through the process.

If you’d like a no pressure chat to ease into the mortgage journey, drop me a line and we can see how close you are to being ready to take that next step, together!

How much of a deposit do I really need?

The market is seeing more and more first home buyers coming into play, so I figured it was time to answer the question that most of you will be confronted with early on: how much of a deposit do I really need to buy a home in New Zealand in 2025?

The truth is that yes, the traditional benchmark has been 20%, but there are ways to enter the market with as little as 5%. So, can you qualify for help with your deposit? And just because you can, should you do it?

First, let’s take a look at the difference between using a 20% deposit and a 5% deposit.

STANDARD 20% DEPOSIT

Most banks and lenders require a 20% deposit, which means, that for a $600,000 home, you’ll need $120,000 saved.

5% DEPOSIT

Through the NZ government’s First Home Loan initiative, you may be eligible to secure a mortgage with just 5% in the bank. For that same property, you’d be looking at $30,000 saved.

The First Home Loan scheme was created through Kāinga Ora to help along first home buyers who can service a mortgage but are struggling to save for a large deposit.

Here’s the deal:

• You have to be a New Zealand citizen, permanent resident or resident visa holder who usually lives in New Zealand

• You must earn $95,000 or less if you’re buying a home solo, without dependants

• You must earn $150,000 or less if you have dependants, or if you’re teaming up with another person to buy

• You need to have a minimum of 5% of the property’s purchase price (including savings, KiwiSaver first home withdrawals, gifts, etc)

• You need to be purchasing the home to live in as your primary residence and the property needs to be less than 1 hectare in size

• You shouldn’t own any other property or land (excluding ownership of Māori land)

Kāinga Ora underwrites these loans, but they’re still issued by banks and lenders, so we’d still have to go through the usual mortgage process!

THINGS TO CONSIDER

• Lender’s Mortgage Insurance may come into play to protect the lender in case you default on the loan. It’s usually about 0.5% of the loan amount

• Your interest rates may be higher as the lender is taking on an increased risk by accepting a lower deposit

• You still have to prove to the bak or lender that you can service the mortgage and that you’re a good candidate for lending (we’re talking income stability, existing debts, credit history - we can look at all that together!)

Wondering if you might be eligible for a lower deposit? Need some guidance through the process or just want to ask some questions about your unique circumstances? I’ve got you! At Clay Mortgages, we’re here to guide you through the entire journey, every step of the way to your first home. Drop me a line and let’s start exploring what options are available to you!

Can I get a mortgage if I’m self- employed?

Being your own boss comes with a lot of satisfaction, but it can, in some cases, make it more complicated to get a mortgage, with the mainstream banks needing you to jump through a few more hoops than the average home loan customer.

Whether you’re a sole trader, in a partnership with someone or a director of a limited company, it can be tough to know whether getting a mortgage is achievable and just how to go about it. 

We’re here to help you gain a better understanding of the process! A good mortgage advisor can help ensure your application has the best chance of success - after all, here at Clay, we’ve built our business knowing what the banks are looking for! Our experience and ability to negotiate on your behalf takes the pressure off you and can really make a difference to your home loan experience and success. 

So, self-employed and starting down the road to getting a mortgage? Here’s how we can make sure you look your best to the banks!

As with most things, first impressions count - so think of it as a job interview - you want to look successful, confident and organised! Put your best foot forward and show them how reliable and on to it you are. Next, is to come prepared with two years of financial statements which will need to include a few things:

• Balance sheet - this shows what your business’s financial position is at a moment in time (usually 31 March, the end of the tax year).

• Profit and loss, or income statement: to show the financial performance of your business for a specific period of time.

• Cash flow statement: a bit like a bank statement, this records money coming and going for a specific period of time. It provides insights into seasonal patterns and/or cash flow problems.

If you don’t have two years worth of these statements, bring what you can and we’ll see what we can do. Keep reading for more ideas on what you can provide to compliment your application and set you up for success.

If you use an accountant, statements are usually presented as a hard-copy report, so you can bring these with you. You’ll probably also receive them electronically, so they can be emailed easily to your lender. 

New Business or Start-Up?

If you’ve recently started working for yourself, things can be a little more challenging. It’s harder to prove your financial stability because your record of income-earning is short and the preferred two years worth of financial statements may not be achievable for you. If owning a home is something you’re looking to achieve, we can still chat now, give you some personalised advice and a better understanding of what kind of timeline you might be looking at.

If your business has taken off and is doing spectacularly well, you can ask an accountant to provide you with a cash flow forecast based on your business performance to date. This will show the banks how an accountant predicts your business to continue growing and might provide a little more certainty.

You could also provide a copy of contracts or agreements you have with key customers as another form of proof of income to show stability and your commitment to keep trading and growing. 

Still employed?

If you are currently toying with the idea of working for yourself and are looking to apply for a mortgage in the near future, it might be in your best interests to continue with your employment. It’s usually better to apply for a home loan while you are still employed by someone else - as the banks number one goal is to make sure you have steady income and can make your payments consistently for the foreseeable future. The more reliable and consistent your finances are, the better! 

If you’re looking for more personalised advice or are just wanting to chat about your options or the way forward, you can contact us here!