First Home Buyers

When talking hundreds of thousands of dollars, a fraction of a percent change in interest rate or repayments can save you valuable funds! In saying that, life is not all about money, so it’s best to borrow with a lender that will result in the most savings in the long term. The team here at MortgageDesign are experts in first home loans and can talk you through all your mortgage questions.

Saving a deposit can be the biggest barrier for most first home buyers. A deposit of 20% or more is the optimum.

If your deposit is less than 20% of the home’s value, your home loan application will be affected by Loan to Value Restrictions (LVR). The restrictions mean that only 10% of new lending for new home loans can have an LVR of more than 80% (the same as a 20% deposit or less). Applications with less than 20% deposit will usually have more assessments and hurdles to jump through.

There are, however, some exceptions to these rules. These exemptions include lending to finance the construction of a new house or apartment.

If you’re unsure how much you need to save for a deposit, talk to the team of professionals at MortgageDesign for home loan advice.

Your deposit can be made up of various funds. These options could include you and/or your partner’s savings, KiwiSaver withdrawal, first home grants or cash gifts from family. Talk to our team if you need advice on what you can use as a deposit.

If you are a first home buyer you can withdraw your Kiwisaver contributions made by you and your employer to use as a deposit towards your new home. You can only do this if you’ve been on KiwiSaver for more than three years and you must leave a minimum balance of $1,000 in your account. You must also live in the house you buy — it can’t be an investment property.

In addition, if you have a combined income of $150,000 or less and you’re buying up to $875,000 in Auckland, you may be eligible for a First Home Grant. You can read about the First Home Grant on the Kāinga Ora website or talk to us to find out more.

When buying your first home, there may be costs outside of your deposit that you need to factor in.

These could include:

• Solicitor’s fees
• Moving costs
• LIM report
• Builder’s report
• Registered valuation

We’ve been through the journey of home buying many times, with many, many borrowers from every walk of life. We can help you through the buying process and talk you through all the details – not just obtaining a home loan.

Property will most likely be your largest financial investment, so you want to make sure you spend your hard-earned money wisely. As mortgage brokers, we also have more options available to us when it comes to finding a mortgage solution. Lenders have very different lending criteria, so you may sell yourself short by only talking to one of them.

The best way to start is by getting your finance pre-approved. Chat with one of our mortgage advisors at MortgageDesign to get the ball rolling.

We’ll work on your behalf to secure pre-approval from the right lender, negotiate the interest rate and finance terms, and talk you through every step of the process.