First Home Buyers
If you’re ready to buy your first home, it’s time to talk to us. There are lots of things to consider but we’re here to answer the questions, unravel the knots and get you into the best position to buy the home you love. Take your first step to your first home.
Stepping into your first home
Step 1 – Save your dollars
The first step’s all about saving for your deposit, so set a savings goal from day one.
Most lenders require a 20% deposit on the amount you want to borrow – so if you’re looking to buy a house worth $300,000, you’ll need to save a deposit of $60,000. Remember – the bigger your deposit, the less you’ll pay in interest over the long term. It’ll feel like a lot to money to save, but it can come from a number of sources – your savings, KiwiSaver and possibly help from family. There’s more than one way to come up with your deposit. Call us to find out more.
Once you’ve worked out how much you need to contribute, check out a money planner like this one on www.sorted.org.nz. It’ll help you set up a budget to reach your goal. Even dropping your daily café coffee could save you thousands over the term of your mortgage – so be ruthless about those non essentials!
If there’s a difference between what your mortgage repayments would be and what you’re currently paying in rent, try adding that amount to your savings. It’ll give you an idea of how well your budget will be able to cope.
Better still, come in and talk to us and we’ll help get you started on your home deposit savings plan straight away.
If you’re a KiwiSaver member, you may be entitled to an additional grant for the purchase or build of your first home. Check out the details here.
Adding up the amount to borrow
There are a few things that’ll affect how much you need to borrow: the size of your deposit, your income and financial situation, and the amount you can afford in regular repayments. Here are a couple of things to help.
Work out your regular repayments and how quickly you could pay off your home loan.
Step 2 – Make it real with a loan
We’re locals too, so we can give you on the ground advice and structure the best loan to see you into your first home.
When you’ve got your deposit together and you’re ready to start going to open homes, come and see us to apply for a loan.
There are a few standard things all home lenders need to do, including us:
- With your permission we’ll conduct a credit check.
- We’ll need evidence of your income
- Bring in personal ID like a driver’s licence, credit card or passport.
- We’ll need evidence of the value of the property you’re hoping to buy
This will all help to get the loan approved quicker. Complete this form to get the ball rolling, or we can have a chat at our offices or in your own home.
Step 3 – Picking the perfect home
When you’ve sorted your deposit and conditional loan approval, it’s time to start looking
for your first home.
It may not be your dream home but it’s your first step onto the property ladder so it’s important you make the right choice and don’t pay more than you can comfortably repay.
Go to open homes, check out real estate sites and talk to people you trust. See for yourself what your money will and won’t buy. Are you up for a renovation or prefer something you can just walk into? Do some good research on what properties are worth in the areas you’re looking at.
Handy House Check
- Is the house close to public transport?
- Are there shops within walking distance if you don’t drive?
- What are the schools like within the zone?
- Is it a suburb with good resale potential?
- Are there family amenities close by like a swimming pool or playground?
- What’s the rental market like if you want flatmates?
Reports and Valuation
When you’ve found a property you’re keen on, do some research and secure a report on the condition of the property. You’ll need to check with us to ensure we’re happy with the property too.
Your best bet is a builder’s report which will identify possible problems with the house, and it may be required before your mortgage is approved. An experienced builder will see things you might miss, which could ultimately save you thousands in repairs down the track.
You’ll also may need a valuation done by a registered valuer. They’ll inspect the property, compare it to others in the area and give you a written report on how much it’s worth. It costs around $600 for a valuation and can often be added on to your mortgage. We can guide you through this process.
A Land Information Memorandum (LIM) identifies any issues like drainage and landslip risks. You can obtain a LIM through your local council or ask your lawyer to do it for you.
Things to keep an eye out for:
- Are there any restrictions on the use of the land?
- Are there restrictions on adding a deck or extension?
- Are there any changes or developments planned in the area/zone?
- Are there building consents that have been issued, erosion or subsidence, roads and flooding, or any contamination of the land?
- Is the price fair? All homes have a Rateable Valuation (RV) – homes can sell above or below it, but it’s a quick way to get an idea on whether the asking price is fair. Check this here.
- Can you get house insurance on the property and what will your insurance premium be?
Lock in a Lawyer
When you have your reports and valuation, talk to a lawyer about what you need in your Sale and Purchase Agreement – so you’re fully prepared to make an offer. They’ll check all your reports and other relevant paperwork to ensure everything’s covered. They’ll also handle all the paperwork.
Final checklist before making an offer:
- Complete all your checks on the property.
- Confirm your finance.
- Get your lawyer involved.
- Know the different ways you can buy a property.
- Have your conditions ready if you’re not buying by auction.
- Be clear about your Sale and Purchase Agreement.
Step 4 – Making an offer
There are three main ways to buy a house in New Zealand:
- Offer and negotiation
Offers are made confidentially to an agent by a set date and time and the seller chooses the preferred offer. You can make this a conditional offer.
Potential buyers bid against each other until one bidder is successful. Your offer must be unconditional as you’re legally bound to buy the house if your bid’s successful. If you win an auction, you must pay the purchase deposit on the auction day. You need to arrange this before the auction.
Offer and negotiation
Offers are made in writing and then negotiated with the seller until you agree on a price and conditions.
Sale and Purchase Agreement
This is a legally binding contract between you and the seller. It states the offer settlement date, chattels to be included and any conditions that must be met before the sale progresses. Always get your lawyer to check it before you sign.
Step 5 – Finalising your paperwork and loan
When your offer’s been accepted and agreement signed, send us a signed copy of your Sale and Purchase Agreement and get help from your lawyer with Kiwisaver HomeStart documentation. We can then start tailoring the best loan that works for you.
Choosing the right loan
We’ll talk you through all your options to ensure we structure your loan to save you money and pay it off sooner. You’ll need to understand the differences between fixed, variable and revolving credit loans – it could save you thousands of dollars in interest. Check out your loan options here.
When we’ve finalised the loan, we’ll send the documentation to your lawyer.
Your home is probably your biggest investment, so it makes sense to protect it against the unexpected. While we don’t offer insurance services ourselves, we do have a partnership with Provincial Insurance Brokers – a respected insurer with the same commitment to Wairarapa and genuine, personal service. Find out more here.
Step 6 – Moving in and next steps
It’s an exciting day, but there are one or two things you’ll need to do;
- You can do a pre-settlement check of the house to ensure everything’s as it should be.
- Your lawyer will check rates and utilities are all paid up and send us a settlement statement.
- We then pay the home loan, and any of your savings, to your lawyer.
- When the funds are received – the keys are yours!
Save some money for extras
Make sure you can cover:
- Movers or a hire truck.
- Any urgent decorating.
- Big ticket items like a new washing machine or fridge.
- Legal expenses, valuation, LIM and builder’s report.
Like any homeowner, you’ll need to budget for ongoing costs like house and contents insurance, mortgage repayment insurance, rubbish collection and rates. Your rates are set by your local council and cover things like roading, water supply, sewerage and public amenities like parks and pools. Check out a property’s rates with your real estate before you buy.
Fixed rates from
Lock in your rate for a set length
of time so you know what
your repayments will be. One
and two year fixed rates differ
because of the loan term.
1 year fixed rate
2 year fixed rate
All WBS loans have
their interest calculated daily
and are charged monthly.
Rates and options
Our rates are highly competitive and you can choose one type of loan, or mix them up to suit your needs.
For information on our interest rates and fees, view here.