Options for First Home Finance
SAVE THE DEPOSIT
In some situations a 10% deposit is possible; however, a 20% deposit is going to be the cheapest option. Anything less than 20% will generally require a registered valuation and will incur extra costs - either a fee, or increased interest rates (or both). The amount of loans with less than 20% deposit is currently ‘rationed’ at the major banks, we therefore have less certainty around this lending in the current environment. The government backed ‘Welcome Home Loan’ can be used with a 10% deposit, however income is means tested and houses need to be within a certain price range. KiwiSaver withdrawal and subsidies can be used as part of the 10% deposit.
get family members to assist
Gift the deposit (at most banks this needs to be 20%)
Allow their house to be used as security (therefore no deposit needed)
Purchase the property jointly with a family member
Family member buys the house as an investment
USE THE Government Backed 'Welcome Home Loan'
The “Welcome Home Loan” is a Government-backed loan aimed at getting middle income New Zealanders into their first home without needing a large deposit. Some participating lenders also allow you to build a new home. A 10% deposit is required, income is means tested and houses need to be within a certain price range. You’ll need to pay a fee of 1% of the loan account (the lender may also apply a loan application fee). Usually, these fees can be built into the home loan. Talk to your participating lender to see what applies.
For more information visit http://www.welcomehomeloan.co.nz
Tips to help you get into your new home quicker
- Watch your "bank account conduct," make sure you don't have un-arranged overdraft fees on your bank statements.
- Keep away from new debts and Hire Purchases
- Apply now for pre-approval for KiwiSaver withdrawal (through your KiwiSaver provider) and First Home Subsidy (Housing New Zealand)
- Have a regular history of savings (even if it is a small amount)