First home buyers - what support you might be eligible for
Doing anything for the first time can feel daunting, and buying your first home is no exception. There are deposits to save for, lenders to be chosen, and pre-approvals to be made …. And that’s before you even get to house hunting!
Thankfully, buying a home is actually far less complicated than it seems when you lean on the right people for guidance and support. And for first home buyers in New Zealand, there is a decent amount of support available.
Let’s unpack what support you might be eligible for if you are looking to buy your first home….
KiwiSaver First Home Withdrawal
If you’ve been a member of KiwiSaver for at least 3 years, then you might be able to make a withdrawal from your savings to put towards your first home. Generally you can withdraw most of your KiwiSaver savings, however a minimum of $1,000 must remain in your account.
In order to be able to withdraw this money, you need to meet certain criteria, including buying the home to live in (it can’t be a rental property). It also must be used for a first home, however, there are some exceptions for previous home buyers if they are deemed to be in a similar financial situation to a first home buyer.
You also need to make sure that your KiwiSaver provider allows for first home withdrawals. Some do not, so checking with your provider is key. We can help you with this.
If you’ve been contributing to your KiwiSaver for a while, you might be surprised at how much you can use towards a home, so if you are looking to boost your deposit, this is always a good option to consider. In some circumstances we might recommend not using your KiwiSaver for a first home, so be sure to have a chat with us first to see what’s more financially beneficial.
The First Home Loan
The First Home Loan is underwritten by Kāinga Ora and is designed to make it a little easier for first home buyers to access a home without a huge deposit. While a typical deposit is often 20%, the First Home Loan lowers the required deposit to 5%, meaning getting into your first home could be much easier.
Like everything there are a number of criteria that need to be met, especially in terms of residency and income. You also need to be purchasing the home to live in, and cannot own any other land or homes (excluding ownership of Maori land).
This loan is issued by selected banks and lenders only, and each has their own lending criteria that need to be met. This includes being able to actually service the loan (your financial ability to repay the loan), your current level of debt, and your credit history. Some banks will also require a Lenders Mortgage Insurance premium of 0.5% to be paid.
Since each lender has its own requirements, you might find yourself getting a no from one lender and a yes from another. This is where we can come in, and help you to choose the participating lender that’s not only going to say yes, but also offers the best terms for you in the long run.
Mortgage Advisers
It goes without saying that a mortgage adviser can be the biggest support in buying a home… and generally our advice and assistance is completely free to you! We’ll help you crunch the numbers and see what you can afford, pull together the best lenders and lending products for your individual circumstances, and help you navigate the entire lending process from the start of your loan, until you pay off the last dollar.
Best of all, we can help you with your applications for KiwiSaver withdrawals and the First Home Loan - making it just that little bit easier for you.
If buying a first home is on the cards, then get in touch with our Queenstown based mortgage advisers and let’s get you into your new home sooner rather than later. Head to our contact us page to request your free, no-obligation chat today.