Checklist: First Home Buyers in NZ

2 years ago
4 min read
By Default Admin

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Before going through with the purchase of your first home, there’s a wide range of factors to consider from your must-haves in your property to finance options. The team at Latitude Homes have put together the below guide exploring some of the most important variables to consider before you buy.

Budget Creation

Budgeting is an essential first step as it helps you determine what kind of home you can afford. Ensure you get a good understanding of all the additional hidden costs that can be associated with purchasing your own home, including:

● LIM report
● Building report
● Loan fees
● Lenders mortgage insurance (LMI)
● Legal fees
● Rates adjustment
● Utilities connection
● Moving costs

Whether you incur some or all of these costs depends on the individual situation. For example, a lender typically requires you to pay lenders mortgage insurance if your home loan deposit is less than 20% of the total value of the property.

Finance Options

The most common way that first home buyers in NZ finance their property is with a home loan (mortgage). Loans can be obtained from big banks, through a broker or through your build company. Common mortgage types include:

● Fixed term - An agreed interest rate is paid over a set time period
● Variable - No agreed interest rate/time period, higher rates but more flexible
● Offset - Your savings are offset against your mortgage balance so you do not pay interest on the full balance of your mortgage
● Revolving credit - Your pay and mortgage are transacted in the same account with interest calculated daily. You have the ability to make lump-sum payments and redraw money at any time

Generally the mortgage Term will be 20 to 30 years. The larger deposit you have upfront will reduce the amount of interest you pay and the length of the loan.

First Home Buyers Grant

As a first home buyer, your ability to access certain grants and concessions can be the difference between whether you can afford to buy a home or not. The First Home Buyers Grant is a government scheme aimed at helping you purchase or build your first residential property.

To be eligible for a First Home Buyers Grant, you must:

● Be 18 or over
● Have earned less than the income caps in the last 12 months
● Not currently own any property (not including Māori land)
● Have contributed the minimum amount to KiwiSaver for at least 3 years
● Purchase a property that is within the regional house price caps
● Plan to live in your new house for at least 6 months.

You must also make sure the house or land you want to buy meets the property requirements. See our guide on the First Home Buyers Grant for more information about eligibility.

Get Pre-Approval

Pre-approval is when a financial institution gives you an estimate of how much you could borrow for a home loan. It involves applying to your selected lender who will assess your ability to repay a loan. Most lenders offer conditional pre-approval for three to six months so you can look for a property that fits that amount.

You can and should get pre-approval for a First Home Buyers Grant. Your pre-approved grant is valid for six months, which gives you time to find a suitable existing property or house and land package that is within your budget.

Source a House Plan

Purchasing a new build? Time to start looking for a house plan that works for you. This is where you start making decisions about must-haves and wish list items including:

● Number of bedrooms and bathrooms
● Storage space
● Backyard
● Deck/patio/outdoor entertainment area
● Interior and exterior design preferences.

At Latitude Homes, we specialise in offering a wide range of high quality, affordable new builds that are customisable and flexible to suit your needs. We offer everything from granny flats to 5 bedroom house plans. In addition to our house plans, we also provide house and land packages in Auckland, Christchurch, Wellington and more.

Explore Build Options

There are a number of ways you can approach a new build. For example, at Latitude Homes we offer four build options to choose from:

● Full build - We take care of the whole build process
● Kitset - We supply plans and building materials then you manage the build
● Shell Only - We build the shell, you finish off building the interior.
● Shell Internal - We build the shell and supply the materials for you to complete the interior.

Get in Touch With Latitude Homes

Looking for a newly built home? At Latitude Homes, we have a range of great house plans available across New Zealand. To get started or for more information, get in touch with our team today.