Homeownership, Money Mindset

First Steps You Can Take Today Towards Buying a Home in NZ

Hi friends,

Recently, I shared my personal home buying experience in Auckland, and at the end, I share a few helpful resources that I used. Today I’d like to expand on these, and share a few steps I’d recommend if you are an aspiring homeowner in New Zealand.

It can be overwhelming with the amount of information out there, so hopefully I can condense and simplify some of it for you. Some of these, like Kiwibuild, are extremely new developments that didn’t exist when I was looking to buy a home, but now do, thanks to our government. Aren’t we blessed to have access to such a wealth of resources and support?

Without further adieu, here are steps you can take today towards buying your first home. I hope they help!

  • Increase your Kiwisaver contribution rate to 8%. You can withdraw your entire balance to use towards your first home, as long as you leave $1000, so the more, the better. (When I withdrew mine, I had been a member of Kiwisaver since 2008 and worked four full-time jobs & four part-time jobs in that time.)
  • Enquire about the best Kiwisaver fund for you, including the First Home Buyers fund, especially if your Kiwisaver is currently generating low returns.
  • Make sure you have an interest-bearing savings account. Most banks have three main types of accounts: your everyday, your on-call, and your savings, which generally rewards you for increasing your monthly balance and making a minimum deposit while charging you to withdraw. If you already have one, make sure you’re meeting the minimum requirements to earn interest at the end of each month – it’s free money.
  • If you have $5000-$10,000+ to invest, why not consider a term deposit? Unlike your regular savings accounts, which offer an average of 2.20%, you can earn between 3-5% interest on your investment – depending on the term.
  • Check if you are eligible for the Kiwisaver HomeStart Grant, and if you are, apply!
  • Ditto for the Kiwisaver Welcome Home Loan, which would mean that you can pay a 10% deposit for your first home rather than the usual 20%.
  • Register for an affordable Kiwibuild home, capped at a maximum price of $650,000. Read more about the eligibility criteria and apply here.
  • Check out the brand new, freehold homes by Solution Street. At the moment, the price of their properties range from $435,000 (Manurewa) to $819,000 (Takapuna), with several mid-range properties priced between $589,000 (Mangere) to $649,000 (Henderson)!
  • If you are interested in buying on Auckland’s North Shore, you can find out more about affordable homes in Northcote here.
  • If you are interested in buying in West Auckland, you can find out more about affordable homes ($450,000-$650,000) in Hobsonville Point here.
  • Sign up for Trade Me and Property Press emails – you can personalise this to your preferences depending on suburb, price, number of bedrooms, etc.
  • Be fully educated and informed on the home buying process with guides from Sorted and Settled. Sorted is brought to us by the Commission for Financial Capability while Settled is brought to us by the Real Estate Authority, and both of them have excellent tools & calculators. Settled is new, and I personally think the checklists and quizzes are brilliant.

Last but not least, although this may be an obvious step.. Talk to your bank or mortgage broker. For me, it was admittedly nerve-wracking calling my bank to ask for a home loan, and in my home buying blog post, I described my experience with ‘the friendliest, most down to earth banking advisor’.

What I didn’t mention? The fact that prior to this, I spoke to a personal banker (in fact, a senior personal banker) at a different bank who wasn’t friendly at all, and showed absolutely zero concern for me. He made me feel worse about my financial situation, amplifying my debt and difficulty in buying a house, and generally made me feel like I was a waste of his time. So it was incredibly refreshing to speak to a banking advisor whose smile I could hear through the phone, who trivialised my debt, assured me about my financial situation, and found a way for me to buy a house. You can never underestimate the importance of speaking to the right people, and I’m so thankful that I did! Enquiring is free, so why not? If you are not successful in buying your first home immediately, you will have a plan to do so – a win-win situation.

I hope this has helped you on your home buying journey, even in its first steps and guiding you in the right direction. I’ve covered all the resources I know, so if you know of any more, please do feel free to share in the comments below. Good luck!

Sophia

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