Low Deposit? Why you don’t need Pre-Approval in 2023

by | Jul 2, 2023 | 1st Home Buyer


To control the property market, the Reserve Bank of New Zealand has established Loan to Value (LVR) ratio limitations. These limitations are meant to counteract the market’s explosive growth that began in 2016. There have been numerous variations of these limitations over time. Banks will be permitted to loan borrowers with equity or deposits under 20% up to 15% of their total lending volume as of June 1st, 2023.

However, did you know that buying your first home with a low deposit is possible, even without pre-approval. You may confidently move through the home-buying process by fully understanding the idea of live deals, engaging with an experienced mortgage consultant, and using online affordability calculators.

In 2023, there is still a chance you will be granted a mortgage loan if you are a first-time house buyer with a substantial income even without a 20% contribution to your purchase. While banks are cautious about giving pre-approvals to low deposit borrowers, there’s an alternative called “live deals.” These deals involve finding a property, making an offer, and having a signed Sales and Purchase agreement that is conditional upon finance.

Of course, it is essential to engage with an experienced mortgage advisor who is knowledgeable with both the home-buying process and your financial condition. You can find out how much you can pay without making a formal application by calculating your affordability through online affordability calculators. This also means that you can quickly get an accurate loan approval figure and get an advice on how to go through the home loan procedure.

In this video, Matt discusses what a live deal is, the concept of Loan-to-Value Ratio, and the importance of working with a mortgage adviser to understanding the home-buying process.

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