Top 5 tips to buying your first home

Posted On Dec 10, 2020 in Finance

Top 5 tips to buying your first home

Getting into your first home takes careful planning and, for some of us, serious budgeting! It is a major decision to enter the property market, so it is important to make sure you are financially ready to take the step. Here are our top five tips to help you on your way to buying your first home.

Tip 1: Get all your ducks in a row

Tidy up any debts you may have before seeking prior approval. It is surprising how much student loans and consumer finance can set you back when trying to take out a loan. 

Set up a savings plan, keep sight of your end goal, and knuckle down. 

The bigger your deposit, the smaller your mortgage, so look at your expenses in detail. Try to find a way to go without some luxuries in your life, and you will be amazed at how much you can save by cutting back just a little.

Tip 2: Understand how much you can borrow

Before you can begin the fun part (searching for your first home), you need to understand how much you can borrow from the bank or lending provider. Shopping around is always a good idea, sit down with several lenders and work through your assets, debt, and overall financial health. This will give you an idea of how much you can borrow, and how much more you need to save to get your foot on that property ladder.

Tip 3: Budget wisely

When reviewing your budget, be sure to include one-off expenses for your new home, such as:
•    Your initial deposit (most lenders require a minimum of 20%)
•    Legal fees
•    Moving costs

Then comes utility bills, furniture, plus all of your usual expenses.  Not sure where you should start?  Begin by keeping track of your current expenses and when they are paid.  

Why not try living with a mortgage before you buy? Set up a bank account so that your savings (+rent) equate to your probable mortgage repayments. You’ll find out pretty quickly if you can cope.

Tip 4: Find a home that you can afford

You want the perfect home, in the right location, we get it.  Depending on where you are looking to buy, you may be eligible for a First Home grant (see below).  Be sure to do some research as to what your entitlements are when purchasing a new home or a block of land to build on or speak to one of our friendly New Home Consultants.  

You may want to get familiar with our House & Land Packages, which are perfect for first homeowners.

Tip 5: Know your entitlements 

If you are a first home buyer, you can withdraw 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. 

Also, if you earn less than $85,000 as an individual and are building new under set thresholds, you may be eligible for a First Home Grant of up to $10,000 per borrower. Find out more here.

Signature Homes has partnered with One50 group to provide financial services to our clients, ensuring you have a smooth and hassle-free build process right from the word go. With over 18 years’ experience providing a wide range of services across New Zealand, and many years spent working in the property development and construction industries, One50 has the knowledge and skills to help you purchase your first home. Learn more about our First Home Coach here

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