How to Become a First Home Buyer

First Home Buyer

Published on: May 20, 2024

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Buying your first home is an exciting milestone, but it can also seem daunting. To help more New Zealanders  become a first home buyer to turn their home-ownership dreams into reality, Omega Financial Services has put together some practical tips to guide you through the process.

1. Align Home Buying with Your Life Goals

Before diving into the home-buying journey, consider how this major decision fits into your broader life plans. Reflect on the following:

  • Career Plans: Are you settled in your current role or industry, or do you foresee a significant change? A stable income is crucial for managing mortgage repayments.
  • Location: Where do you envision living? In the suburbs, the city, or a rural area?
  • Living Arrangements: Will you be living alone, with a partner, or starting a family soon? These factors influence the size of the home you’ll need and your financial commitments.
  • Future Expenses: Consider other potential significant expenses, such as a larger vehicle or education costs.

These considerations, along with your current savings and financial status, will help determine the timing of your home purchase. Whether you plan to buy within the next year or a few years down the road, setting financial goals now will help you get there.

2. Understand Your Finances

Take a close look at your finances by asking yourself key questions: How much do you have saved? How much will you need for a deposit? What does your current budget look like? How will your expenses change with a mortgage? What new costs, such as rates and insurance, will you need to budget for? Are there current expenses you can redirect towards saving for a home?

Typically, first-time buyers need a deposit of 10 to 20 percent of the house’s sale price. However, you don’t always need to have this amount entirely saved up.

  • KiwiSaver First Home Withdrawal: Check if you can withdraw funds from your KiwiSaver to use towards your deposit.
  • Kāinga Ora First Home Loan: This scheme allows some buyers to lower their deposit requirement to 5 percent. These loans are underwritten by Kāinga Ora, making it easier for banks to approve loans that might not meet standard lending criteria. Verify your eligibility and whether your bank offers these loans.
  • Kāinga Ora First Home Grant: You might also qualify for a $10,000 grant to support your first home purchase.

3. Set a Savings Goal

With a clear understanding of your financial position and deposit requirements, set a realistic savings goal and timeframe. For instance, aim to save a specific amount over the next six months or allocate a certain percentage of your income towards your deposit each month.

If your current savings seem far from your goal, consider placing your money in a Term Deposit or a high-interest savings account to earn additional interest as you save.

4. Start a Conversation with Your Bank

Engage with your bank early in the process. They can assist with setting goals, budgeting, and navigating the home-buying process.

At Omega Financial Services, we offer various home loan options, including fixed, floating, and revolving credit, allowing you to tailor a lending structure that suits your needs. Our specialist lenders take the time to understand your situation and guide you from deciding to buy your first home to moving in and beyond.

Conclusion

Buying your first home is a significant and thrilling step. By setting realistic goals and working towards them, you can make this dream a reality. Omega Financial Services is dedicated to helping New Zealanders achieve better banking outcomes and is here to support you throughout your home-buying journey.

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