Buying a house can feel like a daunting task for first-home buyers. From finance to legal options to location, there is much to consider. With this in mind, we have created a list of the key items to consider before you buy — to help make this exciting journey easier.
Speak to a mortgage broker to work out your borrowing power and to understand the pre-approval process. It’s a good idea to have pre-approved finance so you know what you can borrow and therefore buy. This also means finance is all sorted before you make an offer for a house, as it can be difficult to make finance a condition of purchase in a hot property market or auction. A mortgage broker can provide you with up to-date information on different mortgage options across the banks to suit your needs.
Think about your goals — work out your preferred location and the possible budget you'll need for your list of requirements. The ideal house and location is very personal to you. Consider how long you are likely to stay in your first property and what you may need for your future family plans. Think about how many bedrooms you require. Do you need a garage or carport? A fenced in backyard? Are you happy with one bathroom or would you prefer two? Is outdoor/indoor flow important to you? Also consider proximity to public transport and schools if relevant for your situation.
We recommend you do some research on houses in the areas/suburbs you like, to assess what properties are selling for in these areas. QV provides monthly updates on average prices in a given area.
Check how much deposit you have and what percentage that might be in terms of a house purchase price. It's common for banks to ask for 20% of the house price as a deposit but there are some exceptions and this does vary. Talk to your mortgage broker about low-deposit options available.
Check your budget to work out what is affordable for you to pay per fortnight on a mortgage, on council rates for the property, and on home and contents insurance. Use our mortgage calculator — simply put the figure you are wanting to borrow into the calculator with an approximate interest rate and loan duration to work out the repayments. Sorted.org.nz also has some good information on budgeting.
Research lawyer options. Buying a home can be expensive and it’s important to know what you need to consider from a legal point of view. Before you start looking it’s useful to find a lawyer/conveyancer to provide advice. Talk to family and friends, your mortgage broker, or online forums for recommendations. Before you put in an offer for a house your lawyer can ensure you cover what you need to (e.g. conditions of purchase). When your offer is accepted a lawyer will help with your KiwiSaver withdrawal, the ‘sale and purchase agreement’ and the transfer of funds.
Contact your Kiwisaver provider. Kiwisaver can be used to purchase your first home. Once you've been a member of KiwiSaver for three years you may be able to withdraw some of your funds to put towards purchasing your first home. If you wish to do this, obtain letters from your KiwiSaver provider confirming how much you can take out. For more information visit the Kiwisaver government website.
Apply online and obtain letters of approval from Housing NZ if you are eligible for a housing grant.
Our friendly team is always available to talk through the options available to you — give us a call to start your home ownership journey today 0800 000 517. We also have a free first-home buyers' guide.