First Home
Buying your first home is an exciting milestone, but it can feel overwhelming without the right information and support. With the proper guidance, this process can be smooth and enjoyable.
It’s crucial for first-home buyers to consider affordability, deposit requirements, and the different interest rate options available. Getting pre-approval for a loan can also give you a clear understanding of your borrowing capacity, allowing you to act quickly when you find the perfect home.
KiwiSaver, a government-sponsored savings scheme, can be used towards your deposit, and you may also qualify for the First Home Grant, which provides financial assistance to first-home buyers in New Zealand.
Support for First-Home Buyers
The First Home Loan scheme, introduced by Kāinga Ora, lowers the deposit barrier, making homeownership accessible to first-time buyers. With a deposit as low as 5%, this scheme can help you get closer to securing a mortgage and purchasing your first home.
Lower Deposit, Same Opportunity
While most lenders in New Zealand require a 10-20% deposit, Kāinga Ora’s scheme allows eligible buyers to get a mortgage with just a 5% deposit. With Kāinga Ora underwriting the loans, lenders are more willing to approve mortgages for buyers with lower deposits, giving you access to opportunities that might otherwise be out of reach.
Other Services
Having Trouble Managing Your Finance?
Pre-Approval Process
Getting pre-approval for a loan follows the same steps as applying for a loan, except without a property involved at this stage. Pre-approval helps you understand how much you can borrow and provides clarity on the type of homes you can consider.
Gather Financial Information: Collect details about your income, expenses, and debts for the lender to assess your eligibility.
Choose a Lender: A financial adviser can help compare products from banks and non-bank lenders to find the best fit for your needs.
Submit an Application: Once your adviser submits your application, the lender will assess your financial situation and determine how much you can borrow.
Approval: If approved, the lender provides a pre-approval offer outlining the borrowing amount.
Validity: Pre-approval typically lasts for 2-3 months, during which you can find the right property.
Pre-approval doesn’t guarantee loan approval, but it gives you a clearer understanding of your borrowing capacity and can make the home-buying process more straightforward.
Save as Much as You Can
Having a larger deposit can help you avoid additional costs like lenders’ mortgage insurance and secure better loan terms. A higher deposit improves your loan-to-value ratio (LVR), which indicates lower risk to lenders and helps secure more favorable interest rates.
To build your deposit, consider setting a budget, cutting expenses, or using high-interest savings accounts and other investment options. Making smart financial decisions now can set you on the path to homeownership and long-term financial stability.
KiwiSaver Withdrawal
KiwiSaver is a valuable tool for first-home buyers. If you’ve been a KiwiSaver member for at least three years, you may be eligible to withdraw your savings (excluding the $1,000 kick-start) to help with your deposit. You’ll need proof of purchase, such as a sale and purchase agreement, and there may be limits on the property value. Always check with your KiwiSaver provider and seek financial advice.
Call Aarit Finance Today
Contact us to speak with one of our financial advisers about your first-home buying options and take the first step towards homeownership.