No silver bullet for first-home buyers

Posted 4 years ago by Admin

Home buyers need to be beware of any gimmicks that promise to get them in the door of their first house faster.

A new project is being launched this week to fund a house-buying coaching system. People will receive advice on their Kiwisaver funds, and be able to buy insurance to protect their savings. It promises to give members a $1000 grant after two years’ membership, with the company eventually wanting to negotiate deals on mortgage rates, through to home construction, when members move from saving to buying.

Despite the relative ease and support the system suggests it will give buyers, care is needed with these sorts of schemes. It could be an advertising device for the company to primarily generate insurance and Kiwisaver business from a targeted group of customers.

Given today’s climate it’s not surprising to see this sort of service arrive - local housing data certainly suggests it’s harder to buy at the lower end of the home market in Wellington Kapiti - but nothing replaces the benefit of working with a reputable and experienced mortgage or financial adviser. Every buyer’s situation is different, and requires a different plan - one-on-one help will improve your chance of being approved for a home loan. Learning potential lending criteria and exercising financial discipline is the first step to getting on the ladder.

Getting into Kiwisaver as soon as you can is highly recommended for potential buyers. If you’re looking to build a new home, you could get $2000 a year for each year in KiwiSaver, for a maximum of 5 years or $10,000. Existing homes qualify for $1,000 for each year you’ve contributed. That means if you’re single, you could access between $3,000 - $10,000 towards a deposit, or if you’re a couple between $10,000 to $20,000. You do need to meet certain criteria including being under Wellington and Kapiti’s regional price cap of $500,000 for existing houses, or $550,000 for new builds.

We often see first-home buyers who are confused about what help and support is on offer. Having a mortgage adviser on the ground will help improve your understanding of what needs to do done financially to secure a loan, and put in place a personalised, solid, and long-term plan for your first-home dream.

Contact us to discuss your options.

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