Purchasing your first home requires careful planning and for most of us, a major budget adjustment.
The key steps below can help you prepare for your first home loan, and can also help you maximise your lending potential.
Before you start to save, set yourself a savings goal and create a budget. On average, a 20% deposit is required for the amount you would like to borrow. However, there are some exceptions, such as the Welcome Home Loan or Booster Home Loan Scheme, which requires a deposit of 10%. The more you can save towards your deposit, the less you will have to pay back in interest long-term, and the faster you will be able to pay down your home loan. Loan charges will vary depending on your deposit, so it pays to do your research and speak to an experienced home loan adviser before signing anything.
Government and KiwiSaver assistance
If you have saved a 10% deposit, you could qualify to buy a first home under the government’s Welcome Home Loan Scheme.
If you’re a KiwiSaver member and have been making contributions for at least three years, you could be eligible for a Home Start Grant. The Home Start Grant can provide up to $10,000 towards your first home. If you’re borrowing with your partner, you can combine your first home buyer grants, which means you could receive up to $20,000.
You may also be able to withdraw money in your KiwiSaver account to help buy your first home with a KiwiSaver savings withdrawal.
The Right Home Loan Advice
Getting expert advice is key to making the home loan process as smooth as possible. A home loan adviser can help you figure out how much you can borrow and help you with your application and accessing your KiwiSaver and government entitlements. A good adviser will review your home loan on a regular basis to keep you on track.
This article is for informational purposes only and should not be considered as financial advice. It is always recommended to consult with a qualified financial professional before making any financial decisions based on your individual circumstances.