So, you're gonna start looking for a home! We're stoked for you; we all remember what it felt like to bring up a page of property listings and to see endless possibilities. The right house for you is out there, so where do you even start?
Firstly, you need to establish your budget and start saving for your deposit.
Many banks have deposit calculators and mortgage calculators, but remember they don’t always tell you exactly what you can afford! They give a great guideline but you know your own finances better than anyone else.
Do your own research and be realistic about the fact the mortgage won’t be your only expense. Check your credit and tidy up any unpaid defaults and any credit card debt as soon as you can. The less you owe the more you can borrow for your house. Unless you figure out your budget, you won't be able to properly shop around for a new home.
If you’re using your KiwiSaver for part or all of your house deposit, let it be known in the budget planning that you will need 5-10% of the total house sale price sorted before your KiwiSaver can be used.
There’s often a mortgage condition that the banks add in on pre-approval when borrowing up to 90% of the total house cost - this results in you only being able to request your KiwiSaver funds after being unconditional. However, to go unconditional you need to have an amount equivalent to 5-10% of the deposit in the bank ready to go. This can really catch people out, so make sure that you have enough saved before going down this route.
The deposit gets paid to the vendor directly on the unconditional date in your sale and purchase agreement. If you are with a KiwiSaver scheme provider that will allow you to draw down your balance to use against that deposit, then make sure that you've gotten your KiwiSaver withdrawal application sorted well in advance of the unconditional date. Keep in mind that it can take as long as two weeks to get everything together and for your lawyer to be able to access those funds.
Once you have your deposit sorted, buying a house is no small feat. You’ll need a conveyancer or solicitor, a builder, a broker or a bank representative, and of course the support of your friends and family. We have qualified and recommended property solicitors who can help you out! If you want to match with some of them, check out our quick quiz.
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