Preparing for your first home
SM Property

January 8, 2023

Buying your first home is a big goal in life for most of us . With this comes many decisions and processes that can be confusing if you haven’t done the research.

That’s why we’ve compiled a list of things that are beneficial to explore and understand before you start your home buying journey, that will help make the process smoother and more enjoyable.

1 – Government grants and subsidies

There’s several government grants and subsidies in New Zealand that are good to research and be aware of. These grants and subsidies are available for first home buyers to help them get on the property ladder and reach their goals sooner. For example, the Kainga Ora First Home Grant offers up to $10,000 per person to help top up their deposit.

2 – Utilize online resources

Online resources, such as First Home guides, are great to research and utilize. They can help you navigate the process and any tricky terms you may not of heard of before. You can check out our First Home Buyers Guide HERE.

3 – Start saving for your deposit

Your deposit is the amount of money you contribute to the purchase of a home. In other words, it’s the percentage that’s not paid by a mortgage from the bank. This deposit is normally 20% (or 10% for a new build property). The more deposit you have can reduce the amount of interest you’ll have to pay over your loan period.

4 – Location

Consider buying a home in an up-and-coming location, or a location that is amenity rich with good public transport routes. This can optimise your chances of getting a better return on your investment down the line, or can you buy slightly further from your ideal location to get a larger property or save $100,000!

5 – Kiwisaver

Take advantage of your Kiwisaver to help build up your deposit. Talk to your employer and/or bank /fund provider to make sure you are contributing the right amount and are in the right scheme. You can also make sure you are contributing the right amount per year to be able to get the maximum government contribution. You need to have been contributing to Kiwisaver for at least three years to be able to use it towards your home deposit. We have more tips and tricks about Kiwisaver on our Instagram!

6 – Research lenders and banks

This is where a mortgage broker comes in. It’s a good idea to research the various lenders and banks to find the best interest rates and repayments for a home. A mortgage broker will be able to knuckle down which bank will be the best fit for you and can help maximise your chances of getting a mortgage pre approval.

7 – Explore co-ownership options

Co-owning gives you the opportunity to combine your savings with friends or family to achieve the deposit goal faster. In return, it gets you all on the property ladder soon. This could be a good option if you cannot financially afford a mortgage on your own. There are also government co-ownership schemes, such as the Kāinga Ora First Home Partner Scheme. This is a government led shared ownership scheme that helps aspiring first home buyers whose deposit and loan aren’t quite enough to buy a home that meets their needs. We have a whole blog post on it here!

Even if you’re not ready to buy just yet, being prepared and educated on your options is a great start to having a seamless home buying journey. Make sure to visit our other blogs to learn more about home buying or to download our First Home Buyer’s Guide.

If you’re ready to start your home buying journey, contact the SM property team today. We’re here to help you through any questions or concerns you have.

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