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  • Writer's pictureJason Wills

Buying Your First Home

Updated: Jun 30, 2022

3 Mistakes First Home Buyers Make and How to Avoid Them

Buying your first home can be a daunting task, and those of us who can recall that experience will remember the ups and downs that came with it. The process begins with a few conversations with your partner or friends about your landlord and how frustrating it is to have to deal with them. The quarterly property inspections, rent increases and every time you need something fixed it takes 2 weeks. Quite frankly you have had enough. One of your friends asks if you’ve looked at buying your own home. Another boasts it’s the best move you’ll ever make. Uncle Bob chimes in with some advice dating back 30 years when he bought his first home for $100,000 and only needed a 5% deposit, but interest rates were 18%. Now you’re completely confused and unsure where to start. Before I give you my advice, here are the three mistakes first home buyers make.

  1. Listening to Uncle Bob

  2. Going directly to a bank to see how much you can borrow

  3. Thinking that a Mortgage Broker costs you money

First up, Uncle Bob is so far out of touch that he thinks lol means lots of love. But seriously, Uncle Bob is just not up to date with the current loan to value ratio’s, deposit required for a loan, how to use KiwiSaver as a deposit, and the government home loan scheme. Secondly, many first home buyers are advised by friends and Uncle Bob, to talk to their bank manager. This in and of itself can be a demoralising exercise. That’s if you can even get an appointment with a real person. Many times, the bank will look at the basics of your income, how long you’ve been in your job, what are your monthly outgoings, and what other monthly payments do you have. They can be brutal and shut you down. From my recent experiences I recommend you speak with a Mortgage Broker as your very first step. A Mortgage broker can look at the same criteria as the bank, but they will offer other solutions such as helping you work out if you can use your KiwiSaver as a deposit. They will also suggest that if you're a first-time home buyer, you've been making regular KiwiSaver contributions for 3 - 5 years, you may be eligible for a government First Home Grant of up to $10,000 by way of Kainga Ora – Homes and Communities. The Mortgage Broker literally holds your hand through this part of the process and will arm you with a bank pre-approved loan. And in some cases where the main banks may reject your loan, the Mortgage Broker's can work with second tier lenders to get you over the line. They are also clever at negotiating with banks on the best possible loan rates and in some cases convincing the bank to pay your solicitors fees. Now you have your pre-approved loan information, you can start looking for your dream home. If you can access your KiwiSaver for the deposit, the highest price you can look at is $550,000, for an existing home or $750,000 for a new build. So bear that in mind as you start your search. I’d recommend finding a real estate agent to do the hunting for you. If you find a good agent, their aim is to negotiate on your behalf with other real estate agents who have listed the property. All the real estate agent will ask of you (and this is super important) don’t go through any open homes without talking to them first. Their job is to work for you, and they can’t do this if you enter into discussions with another real estate agent. Your real estate agent and mortgage broker will guide you through the purchase of your first home. They will recommend a solicitor, insurance company, moving company, or anything else you may need to take the pain, stress and anguish away. The end result…

Kezzy & Brent - First Home Buyers“Thanks for all your hard work helping us get in to our first ever home” – Kezzy Beach

“Thanks for all your help. You have been amazing! Thanks again” – Brent Laby

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