First home buyers

Buying your first home can be a daunting undertaking, so we’re here to remove technical language, simplify the process, and make sure you get a great mortgage.

Bankers work for the bank. Real estate agents work for the seller. We work for you – the home buyer. We do this every day, so we'll be able to answer all your questions, including:

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• How much can I afford to borrow?
• What's the best bank for me?
• Who's offering the best rates right now?
• How do I strengthen my mortgage application?
• Fixed? Floating? Or a combination of both?
• How much could I save?
• Who else should I talk to? – including a good lawyer.

If you’re thinking of buying your first home, and need an expert team on your side, get in touch.

Hunting for your first home can be both exciting and challenging. The main thing is to stay on track, even if setbacks and surprises occur. Below are some key aspects to keep you on the path to success.

Your deposit

Traditionally, a 20% deposit was required to secure property lending, leaving many first home buyers well short of their own home. The constantly evolving property and lending environment means that in many cases you can purchase with as little as a 5% deposit. Additionally, there are also several things that can complement the cash you already have set aside as your deposit. Options include:

• Saving more between now and application time
• Assistance from family:
• Gifted money
• Equity or guarantees
• KiwiSaver
• KiwiSaver First Home

KiwiSaver for first home buyers

KiwiSaver has several features which have helped many kiwis into their first home.

If you've been a member of KiwiSaver for at least three years, you may be able to withdraw some of a KiwiSaver Scheme investment to put toward purchasing your first home. You’ll most likely be eligible for a KiwiSaver first home withdrawal if:

• You've been saving with KiwiSaver (or another complying superannuation fund) for at least three years
• You're going to live in the home you're buying, or build a home to live in on the land you're buying
• The property or land is in New Zealand
• You're a first-time property or land owner – though even if you've owned property before, you may still be eligible to withdraw your savings if Kainga Ora decides that you’re in the same financial position as a first home buyer
• It's the first time you've made a KiwiSaver withdrawal to buy a home.

By meeting the criteria above, you’ll be able to use a KiwiSaver Scheme investment to put toward the purchase of your first home. You'll need to leave a minimum balance of $1,000 in the KiwiSaver account and you cannot withdraw any amount transferred from an Australian complying superannuation fund.

KiwiSaver First Home Grant

You could be eligible for a KiwiSaver First Home Grant of up to $5,000 to buy an existing home, or up to $10,000 if you are building or purchasing a newly built home. If you’re doing this with someone else and they're eligible, that means you could get up to $20,000 between you.

Kianga Ora administer this grant, so check with them to see if you are eligible. Income caps, house price caps and other criteria apply.

Borrowing power

Once you understand your available deposit, you can take stock of your financial health and calculate how much you can afford to borrow. This is a critical step, and will give you a better idea of what you can afford to buy.

There are several factors to consider, and different lenders (mainly banks) often focus on different areas. Your income and credit score will be major components, but so are your debts, outgoings, and number of children. Plenty of online calculators will provide a good starting point - a quick online search will bring up dozens of them for you to try.

When it’s time for a more accurate figure, getting your mortgage pre-approved by one or more lenders is the next step. This is something one of our mortgage advisers (often referred to as mortgage brokers) can assist you with.

Understanding your desired property market

Websites such as Trade Me property – Property Insights, and Homes.co.nz are great for basic information on recent sale prices, estimated market values, and registered valuations.

However, keep in mind that these are just estimates. To get the real picture, you’ll almost certainly need to do plenty of active research of your own.

Open homes

The more open homes you attend, the more likely it is you’ll be able to piece together a realistic picture of your desired property, and its size, features, and location.

Letting a few real estate agents know what you’re looking for is also a good idea – if they’re good, they’ll contact you whenever those sorts of homes come onto the market, reducing the chances you’ll miss a great opportunity.

Making an offer

Before excitement takes over and you dive head-first into making an offer, there’s one important question to ask: is there more than meets the eye?

Real estate agents should tell you about any issues with a property they’re aware of, but what if they don’t know everything? What if there are hidden problems lurking under the floorboards?

A little expert help can save yourself from making costly mistakes. A good lawyer will help you identify contractual issues and problematic clauses, while a qualified inspector will check out the property from top to bottom, looking for issues. Their reports may cost upwards of $1,000, but they’re worth every cent.

When you’re confident this is the property you want it’s time to make an offer. This will differ based on the type of sale, for example: you may have to win a property auction, negotiate the price with the vendor, or put down the highest bid (tender).

Whatever the case, set yourself a reasonable budget and avoid overbidding. Knowing how much you can afford will help you keep emotional judgements to a minimum, allowing you to purchase on terms that meet your needs.

Your first home - assistance is available

Assistance from us to help secure your first home is usually free to you, as we will be paid by the lender. So that you know our financial advisers (in this instance often referred to as a mortgage broker) are truly putting your interests first, our advisers are all paid a salary instead of commission. They also have no incentive to promote one lender over another.

By seeking our assistance, you’ll receive the following support:

• Determining if your deposit is sufficient
• Determining how much you can afford
• Finding the mortgage provider who best suits you
• Securing the lowest interest rates possible
• Tailoring the mortgage to suit your individual needs
• Connecting you with any other specialists you may need, such as a lawyer
• Talking you through the process in plain English, so you know you’re doing the right thing for your lifestyle and financial position

If you’re ready to buy a house but need some experts to guide you through the number crunching, get in touch!

What now?

For a free and no-obligation chat with a mortgage broker about purchasing your first home, call 0508 232 663 or leave your details and query below. It'll be our pleasure to respond within one working day.