Buying a home is probably the biggest financial investment you'll make in your lifetime. So it's one to get right. Before you take the plunge, it's worth educating yourself a bit about home ownership.

Useful links

• NZFFBS: The New Zealand Federation of Family Budgeting Services runs Budgeting For Change courses, which can be of use to everyone, not just potential homeowners.
  
  
• Sorted: www.sorted.org.nz, the Retirement Commissioner's website. Provides financial planning advice and many useful calculators.
  
  
• Welcome Home Loans: www.welcomehomeloan.co.nz.
  
  
• Banking Ombudsman: www.bankombudsman.org.nz; email help@bankombudsman.org.nz; freephone 0800 805 950; or write to P.O. Box 10-573, Wellington.
  
  
• New Zealand Mortgage Brokers Association: www.nzmba.co.nz; phone 09 486 5456.
  
  
• Interest rates: see our guide to the latest rates on www.consumersaver.org.nz.

Jargon buster

You'll encounter a lot of jargon around home loans. Here's what it all means.

Establishment fee: Also called the "application fee", this is the fee to set up the mortgage. The establishment fee may be set at a minimum or maximum dollar amount, or some percentage of the amount borrowed. It is often negotiable.

Lending limit: The maximum percentage of the house valuation the lender is generally prepared to lend up to. In some circumstances, lenders may lend a higher percentage but could charge extra for this.

Mortgage: Strictly speaking, this is a legal document that secures property for a loan. But, like most people, we also use the term to mean a loan to buy a house. The "mortgagee" is the lender and the "mortgagor" is you, the borrower.

Mortgagee sale: If you cannot repay the mortgage, as a last resort the lender sells the house to get its money.

Principal: The amount you borrow.

Reducing mortgage: Each repayment comprises the same amount of principal. That means the interest charge is less each time, so each repayment is less than the previous one (assuming interest rates don't change).

Revolving-credit facility: Essentially a large overdraft secured by your house, which you access using a cheque account or credit card. The interest rates on revolving-credit facilities are usually around the same as normal floating rates.

Table mortgage: The most common form of mortgage. Unless interest rates change, the repayments do not alter over the life of the mortgage. But the interest and principal components of each repayment do change. At first, most of each repayment is interest - by the end, most is principal.