New Home Construction

There are several construction contracts available, so it’s important to choose the one that’s right for you.

Here are a few of the most common options:

Turn key contract – this is great for buyers but can make it tricky for builders. Simply put, it’s a fixed price contract between you and the builder that specifies a completed build or renovation, including everything like flooring, painting, driveways and landscaping. All costs are decided upfront. You don’t make any payments until the property has been completed and settled.

Land and build contract – similar to the Turn key, this specifies the completion of a property ready to be lived in. However, there is a key difference: in a Land & Build contract, there are progress payments involved for you as the buyer. This means that effectively, you finance the build to completion rather than the builder.

Kit set and pre-fabricated homes – in this contract, you buy a section then engage a builder to construct a kit set or pre-fabricated home. This is a highly affordable and flexible option for someone who is confident with DIY.

Deposits for new builds are often significantly less than they are for existing properties. Typically, first home buyers will need to pay a 10% deposit on signing the written contract. This is 10% less than the deposit needed for buying an existing house.

Investors also pay less deposit at 20% (compared to 40% for existing properties) with an added benefit of the new home being exce

This financial benefit can make a new home build a more affordable option. If you’re unsure about how much you need to save for a deposit, talk to the team of professionals at MortgageDesign for construction loan advice.

Your deposit can be made up of various funds. Some of 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.

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.