Buying a first home is a big decision; quite possibly, the biggest one you’ll ever make. Which is why it pays to understand exactly what you’re getting yourself into. To ensure you’re armed with the right information so you can make good decisions about your financial future, here is a step by step guide to buying your first home.
Step 1: Finance
The first step in the home buying process is saving a deposit and this is usually the biggest hurdle for most first home buyers.
Even if you don’t have a 20 per cent deposit, there are still finance options available to you. Along with your own savings, you may be able to withdraw your KiwiSaver to use as a deposit to buy a first home, access the First Home Grant, or have a family member act as guarantor to help boost your deposit savings.
Once you have your deposit, we recommend you apply for a home loan pre-approval so you know how much you can afford and how much the bank will lend you. Our team of mortgage advisers can assist you in securing a pre-approval.
Recent changes to the First Home Loan scheme mean you could qualify for a home loan with just 5 per cent deposit. Talk to our team of advisers to find out if this is an option for you.
Step 2: Property Search
Once you have a pre-approval you can begin searching for your dream home. When you find a property that meets your needs and is within your budget, contact your Mortgage Express adviser to confirm the property meets your conditions of pre-approval and then you can go ahead and make an offer.
Step 3: Your offer
For many buyers, this is the most nerve-wracking step in the process. If your offer is accepted by the seller, you’ll sign a Sale and Purchase agreement including any conditions you need to be met before the sale goes unconditional. Some of the conditions you should include are: finance, a building report, and a LIM report.
Step 4: Unconditional sale
Going unconditional means neither the buyer nor the seller can back out of the sale. At this stage, you should receive an unconditional letter of offer which you’ll need to take to your solicitor to confirm that your finance condition has been met and that all other conditions have been satisfied by the due date. Your deposit is also paid to the real estate agent.
Step 5: Settlement
Once your solicitor confirms that settlement has been made and change of ownership is registered with the Land Transfer office, you’re officially the owner of your first home. The remaining figure owing to the seller is also paid on settlement.
Now that you own your own home and you have a mortgage to service, it’s worthwhile reviewing your mortgage at least once a year to ensure you’re still getting the best deal possible.
Get in touch with a Mortgage Express adviser to talk about buying your first home or to review your existing mortgage to ensure you’re getting the most out of your mortgage.
While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Mortgage Express Limited for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication.
A Disclosure Statement is available on request and free of charge