Are you ready to get on the property ladder? For many first home buyers the process of buying a house can be quite daunting, but with the right mortgage broker it can be a really exciting experience! We want to see more first home buyers enter the market, that’s why our Mike Pero Advisers have access to a broad range of lenders and loans to suit all types of Kiwis.
Get your loan pre-approved
Pre-approval provides a first home buyer with greater understanding of how much a lender is prepared to lend. It also helps speed up the process once you’ve found the home you like.
However, it's important you understand the terms and conditions of your pre-approval and always read the fine print. Make sure you talk to your Mike Pero Adviser about the conditions and restrictions of your pre-approval and know that in the case where the bank does say no, your Mike Pero Adviser can talk to you about other possible solutions.
For additional reading on buying your first home, please download our Home Buyers Guide.
Get on the ladder with a smaller deposit
Want to realise your dream of home ownership but don’t have a huge deposit? Mike Pero has access to a broad panel of lenders that can make your property ownership dream a reality, even if you have less than the 20% most of the banks typically require. Also, there are a number of government grants you can apply for to boost your deposit size, but not everyone is eligible – so if you want to buy a property soon, but don’t have a big deposit, be sure to talk to a Mike Pero Adviser.
To find out your borrowing power based on your current deposit, please use our handy calculator here.
You can use cash gifts as a deposit
It is true that most banks will want to see evidence of genuine savings when you apply for a mortgage. This means you need to have the deposit in your account for a minimum period of time and sometimes at least 5% needs to be from accrued savings. However if you have access to money that you haven't saved and want to use it towards the deposit for your first home – your Mike Pero Adviser will be able to talk to you about different lenders that accept deposits sourced from non-genuine savings. So, whether your Great Aunt has left you some money, or you plan to sell your car to help buy your first home, there are lenders out there that think differently – and your Mike Pero Adviser knows them well.
Think about using your KiwiSaver
Good news, if you’re a first home buyer and you’ve been contributing to KiwiSaver for more than three years - you may be able to use some of the money to help buy your first home.
If you’re eligible, you may be able to withdraw some, or all of your KiwiSaver member contributions, employer contributions, returns on investments received or any member tax credits. However, you can’t withdraw the $1000 government kickstart contribution. Using your KiwiSaver is a great option for first home buyers who want to increase the size of their deposit and own more of their first home. Mike Pero is well equipped to work with borrowers who are utilising their KiwiSaver, so just tell your mortgage broker when you first reach out to them.
KiwiSaver HomeStart grant
Want that little extra bit of help to get you across the line? Then you could consider a KiwiSaver HomeStart grant. If you’ve been contributing to KiwiSaver for three years and fit within KiwiSaver’s criteria you could be eligible for up to $20,000 of additional grants.
If you’re purchasing an existing home then you could qualify for up to $5,000 for each member. Also, if you’re building or purchasing a new home, or purchasing land to build a new home on, then you could qualify for $10,000 for each member.
To be eligible for a KiwiSaver HomeStart grant you must:
- Have been contributing the required minimum amount to KiwiSaver for at least three years
- Be 18 years of age or over
- Be purchasing or building your first home
- Have a household income (before tax) of less than $80,000 per year (for one person), or less than $120,000 per year (for two or more people)
- Have a deposit that is 10% or more of the purchase price, including the addition of the grant
- Plan to live in the house for at least 6 months following settlement or completion of the property
When buying your first home, every little bit helps – so make sure you understand how the KiwiSaver HomeStart grant, along with Mike Pero, can help put the keys to your dream first home firmly in your hands.
Consider a Welcome Home Loan
While saving a big enough deposit is the obvious way to get on the property ladder – there are additional initiatives designed to help. Welcome Home Loans are issued by selected banks, underwritten by Housing New Zealand, and allow the bank to lend on a lower deposit without any restrictions. For first home buyers it can mean getting on the property ladder sooner.
The criteria you need to qualify for a Welcome Home Loan is quite restrictive, so please read up on it before you apply. More information is available here.