Want to buy your first home in less than two years? These 5 tips will help

Written by Money Empire

July 26, 2019

Woohoo! The share of new residential lending to first home buyers has shown a steady increase in 2019 according to Reserve Bank information. That means more and more young Kiwis are buying and moving into their first homes.

Are you looking at buying soon? Be part of this awesome trend and follow our five tips to get into your first home fast. 

1. Check your Kiwisaver

The average New Zealander has $13,000 in their Kiwisaver account, Stats NZ data shows. If you meet certain criteria, you could withdraw most of your balance to help you buy your first home. Every dollar counts in this market so don’t forget to check your balance before you start saving for a deposit. 

2. Get government help

To help first home buyers, the government offers special finance under its Welcome Home Loan scheme. This allows first home buyers who fit the bill to secure a home loan with a 10 per cent deposit from qualified lenders. Securing one of these is a fantastic way to fast-track your first home dreams. 

If you and your home meet the criteria, you could also be eligible for a government HomeStart grant. If you do, you can get up to $10,000 per purchaser (or a combined $20,000 per home for a couple) towards purchasing an existing build and up to $20,000 per purchaser (and $40,000 per home for a couple) towards a new build. 

3. Break your goal up

Let’s say your goal is to buy a $600,000 apartment with your partner and you’re aiming for a 10 per cent deposit under the Welcome Home Loan scheme. That’s $30,000 each to save. When you look at it that way, it probably feels unthinkable, even impossible. 

But if you break it down into weekly savings goals, it suddenly becomes a bit more doable. That’s $288 a week each that you need to save to be in your first home within 2 years – which is still a big ask, but with the right plan in place, you can make it happen. To make it work, consider making whatever sacrifices you can like moving somewhere cheaper or even living off one partner’s salary and saving the other.

4. Drop your debt

When they consider your application a lender, will weigh up the risk. They ask “Will this person be able to make repayments?”

If you’ve got a lot of debt, the answer is likely to be “no”. This could mean your application for lending is denied. For that reason, it’s always best to pay down as much debt as possible before you start applying for home loans. 

If you’ve got several loans, credit cards and debts, it might be a good idea to consolidate them into one low-interest rate loan to make it easier to pay them off fast. 

5. Get the right help

Buying your first home can be confusing and challenging, even a little stressful. Luckily, you don’t have to do it alone. 

With a team of experienced professionals around you, making all those hard decisions will be much easier. Your team should include:

    • A specialist property lawyer with experience in first home purchases: ask for a cost estimate before engaging. 
    • A building inspector: make sure they take the time to look under the house and in all the nooks and crannies. If you need clarification on the results of their report, be sure to call them. 
    • An experienced, local buyer’s agent: these guys are just like normal real estate agents but they work in the buyer’s interest – not the seller’s. 
    • An electrician and a plumber: if you’re buying an older home, it’s a good idea to have an electrician and a plumber check the home too as wiring and plumbing issues can be costly to fix. 

Last but not least, you’ll need someone to help you navigate your home loan application, advise you on the best options and negotiate with lenders. That’s where a mortgage adviser like Money Empire comes in handy. If you’re looking to buy your first home soon, make the loan part easier – get in touch with one of the expert mortgage advisers here at Money Empire.

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