FIRST HOME BUYER
Buying your first home is an exciting but big step to take. It's also one that comes with many questions and decisions to make.
The first and most likely question is, what can I purchase and borrow?
I can explain this in 2 simple steps:
The first step is to find out how much you have to deposit or contribute. Gone are the days of 100% borrowing where you could borrow the full amount of the purchase.
All banks want you to come up with the deposit or contribution to put towards the purchase and then they will lend you the rest. The amount that banks ask you to contribute differs, this can range from 20% to 5% of the purchase price.
Your deposit/contribution can come in many forms;
2. Bank Criteria - Affordability
When applying for a new loan, whether this be through Mortgage Field or directly with your bank (regardless of how long you have been with them) you must show you can afford to repay this back. Every bank has their own way of working this out.
This is where we can help. We have access to the tools used to work this out to satisfy the banks and/or lenders.
There are three simple ways!
KiwiSaver and First Home Grant
Firstly, you must be eligible to withdraw from your KiwiSaver to purchase your first home. To be eligible, you must have been a KiwiSaver member for three or more years and can only withdraw to purchase your first home, not an investment property.
You will need to apply to your KiwiSaver provider if you want to make a first home withdrawal.
Please note: A minimum of $1,000 must remain within your KiwiSaver when withdrawing for your first home.
First Home Grant
This is a grant available for applicants who wish to buy or build their first home.
To be eligible for a First Home Grant, you must be over 18 years of age, have earned less than the income caps in the last 12 months, contributed to your KiwiSaver for at least 3 years or more, purchase a property that is within the regional house price caps and agree to live in the house for at least 6 months.
If you are purchasing an existing/ older home, you can get $1,000 for each of the 3 (or more) years you've paid into the scheme. The most you can get is $5,000 for 5 or more years.
If you are purchasing a new home, you can get $2,000 for each of the 3 (or more) years you've paid into the scheme. The most you can get is $10,000 for 5 or more years.
Further details on the First Home Grant can be found on Helpful Links
GENERAL FIRST HOME BUYER FAQ
Does Mortgage Field charge a fee for this service?
No fees will be charged for our home loan services as we get paid by the bank you choose to borrow from.
What costs must I consider when purchasing my first home?
Low Equity Fee/Margin - If you are contributing less than 20% towards the purchase of your home, then the bank may charge a fee or add a margin to the interest rate for the added risk. The fee may be added to the loan so you do not need to cover the cost upfront. The margin is a percentage amount that is added to the interest rate on your home loan. The fee or margin varies from bank to bank depending on which method they use to charge for low deposit loans.
Legal/Conveyancing Fee - You will need a solicitor or conveyancer if you are purchasing a new property. Generally, these can reach between $1,500 - $2,500 depending on how simple or complex the transaction.
Registered Valuation Report - This may be required by the bank or you may want one for peace of mind to ensure you are buying within market value. In any case, this is normally paid by you. These can start from $700, depending on the valuer used, purpose, location and type of property being valued.
Builder Inspection Report - If you want sound advice around the structure and integrity of the house you wish to purchase, then you may want one of these. These are generally not required by the bank unless they have some concerns with the dwelling. These can range from $150 upwards, so do your homework to ensure you are getting quality advice for what you are paying.