Buying your first home is an exciting milestone but knowing where to start can feel overwhelming. Between saving for a deposit, understanding home loans and figuring out the legal process, there's a lot to consider.
Whether you're hoping to buy soon or just starting to explore your options, here are five practical moves that can help you prepare for your first home in New Zealand.
1. Get a clear picture of your finances
Before browsing property listings, take a closer look at your financial situation.
Start by understanding how much you earn, spend, and save each month. Consider your existing financial commitments, including personal loans, credit cards, student loans, and other regular expenses.
Lenders will assess your financial circumstances when considering a home loan application, including your income, expenses, debts, and ability to make repayments.
Smart move: Create a realistic monthly budget and work out how much you could comfortably put towards mortgage repayments while still allowing for everyday living expenses and unexpected costs.
2. Explore your deposit options
Saving for a deposit is one of the biggest steps towards home ownership.
A 20% deposit is a common benchmark in New Zealand, although some lenders may consider applications with smaller deposits, depending on the buyer's circumstances and lending criteria.
Your deposit could come from several sources, including:
Personal savings
An eligible KiwiSaver first-home withdrawal
Financial gifts or contributions from family
Other sources accepted by your lender
If you've been a KiwiSaver member for at least three years, you may be eligible to withdraw most of your savings towards buying your first home, provided you meet the relevant requirements.
Smart move: Check your KiwiSaver balance and speak with your provider early to understand your eligibility and the withdrawal process.
3. Understand the full cost of buying a home
Your deposit isn't the only expense you'll need to prepare for.
There are other upfront costs, including legal fees, building inspections, LIM reports, property valuations where required, and moving expenses.
Once you own the property, you'll also need to budget for ongoing costs such as:
Mortgage repayments
Council rates
Home insurance
Maintenance and repairs
Body corporate fees, where applicable
These expenses can add up, so it's worth understanding them before deciding how much you can afford to spend.
Smart move: Set aside a separate budget for buying costs and unexpected expenses, rather than putting every available dollar towards your deposit.
4. Talk to a lender before you start seriously house hunting
You don't need to find your dream home before speaking with a bank or mortgage adviser.
In fact, understanding your borrowing options early can make your property search more focused.
A lender can help you understand how much you may be able to borrow, what deposit requirements apply, and what information you'll need to provide.
You may also be able to obtain conditional home loan pre-approval.
Remember, pre-approval isn't a guarantee that a lender will finance any property you choose. Final approval may depend on the property itself, your financial circumstances and the lender's conditions.
Smart move: Speak with a lender or mortgage adviser early so you can search within a realistic price range.
5. Build your team of professionals
Buying a home involves important financial, legal and property decisions. Having the right people to guide you can make the process easier to understand.
Depending on your circumstances, your team may include:
A bank or mortgage adviser to help you understand financing options.
A lawyer or conveyancer to review contracts, explain legal obligations and manage the legal transfer of the property.
A property inspector to assess the condition of a home you're considering.
An insurance adviser or provider to help you understand appropriate insurance cover.
It's particularly important to engage a lawyer or conveyancer before signing a sale and purchase agreement.
Smart move: Start speaking with professionals before you're ready to make an offer. This gives you time to ask questions and understand the process without unnecessary pressure.
A little preparation can make a big difference
You don't need to know everything about buying a home from day one.
Start with what you can control: understand your finances, explore your options, learn about the buying process, and surround yourself with people who can provide reliable advice.
Every step you take now can help you make more informed decisions when the time comes to buy.
Ready to learn more?
Explore the First Home Buyers Resource Hub for more practical guides, helpful information and insights into buying your first home in New Zealand.
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Disclaimer: This article provides general information about buying a home in New Zealand and is not intended as personalised legal or financial advice. Requirements and individual circumstances vary. Seek advice from qualified professionals before making financial or legal decisions.