First Home Buyer’s Guide: 5 Essential Steps

First home buyer's guide

5 Essential Steps to Shape Your Homeownership Plan

Buying your first home is an exciting milestone, but it can also be a complex process. At Achiva, we understand the challenges involved in securing your dream home. In this step-by-step guide, we will walk you through some key steps, with a particular focus on getting the right home loan to make your dream a reality.

It’s essential to carefully consider your financial goals and the timeframe when buying a home. Purchasing a home is a long-term commitment. Getting to know the market and planning ahead will be instrumental in helping you overcome some challenges along the way.

Tip: Some free online tools to help you:

Before diving into the world of buying a home, it’s important to know what you’re getting into financially. From legal fees to moving costs, we’ll break down all the costs involved in owning a home, both initially and as ongoing expenses. This knowledge will help you budget effectively.

Initial costsOngoing costs
· Legal fee (property purchase related and other consultations)
· Property inspection (if required)
· House valuation (if required)
· Low Equity premium or low equity insurance (maybe able to add to the loan) for over 80% lending.
· Buying new furniture, household appliance
· Moving costs.
· Mortgage (interest and principal repayment)
· Council rates
· General insurance (house, contents)
· Bodycorp fees (if applicable)
· Personal insurance (such as life, trauma, disability, income protection, mortgage protection insurance).
· House maintenance (Lawn, repairs etc).

Tips and resources:

  • Seek Professional Quotes: Reach out to your preferred professionals, such as lawyer, to obtain estimates for their services. This will give you a clearer picture of the professional costs involved.
  • Utilise Online Resources: Make use of online tools, including mortgage calculators and insurance quote websites. These can provide you with valuable insights into potential expenses.
  • Check Local Council Rates: Visit your local council’s website to gather information about council rates.

Understanding these fees is an important part of calculating the overall costs of your home purchase.

Your deposit is a fundamental part of the home buying equation. Deposit options including,

  • Your own saving
  • KiwiSafver first home withdrawn (check with your provider to find out eligibility, withdrawn process, timeframe and who else is involved such as lawyer)
  • First Home Grant (if you’ve been a member for over 3 years, check out Kianga Ora to find out more)
  • Kāinga Ora’s First Home Loan can make it easier for you to get into your first home by lowering the required deposit to 5%. to find out more check out Kianga Ora site to find out more.
  • Gifting from family members or equity from your family members. We recommend each party seeking independent legal advice when pursuing an gifting or support by using family member’s equity as deposit option.

When your borrowing surpasses 80% of the property’s value (LVR), the bank typically charges a low equity premium or margin. This cost reflects the heightened risk for the lender.

Before you start your home hunting journey, it’s crucial to assess what you can afford. Take a closer look at your budget, a simple way to have look how much you can afford is by:

  • Imagine a couple who put $800 each week toward rent and $200 into savings. In total they make weekly commitment of $1,000, plus their KiwiSaver contribution (usually 3% of their salary).
  • By using a mortgage repayment calculator, they can see what kind of loan this commitment will support. For instance, if they had a $550,000 mortgage with an estimated 9% interest rate over 30 years, their weekly mortgage payment would be around $1,021.

Your mortgage adviser will review your expenses with you as part of the home loan application process. This is an opportune moment to take stock of your expenses and prepare yourself by making any necessary adjustments。

Securing pre-approval for a home loan is an important step of your home buying journey. At this stage, we recommend you to work closely with your mortgage adviser to define your goals, create a realistic budget, and gather all the necessary information required for the loan application. This includes income confirmation, bank statements, and proof of your deposit plus all other relevant documents.

  • Work with your mortgage adviser to set goals, create a budget, and gather the needed paperwork, like income details, bank statements, and proof of your deposit.
  • Pre-approval tells you how much you can borrow, the costs involved, and any lender conditions. If your application is denied, don’t worry; your adviser can explore other options.
  • Pre-approval typically lasts 90 days (for loans under 80% lending) and can be extended if your financial situation hasn’t changed.
  • If you plan to attend an auction or make an unconditional offer, you must meet all bank conditions. Your adviser, real estate agent, and lawyer will help you through this stage.

Now that your finances and deposit are ready, it’s time to find your dream home. Work with a local real estate agent who understands your budget and preferences. They’ll help you explore available properties, arrange viewings, and negotiate deals for you.

Collaborate with your lawyer to discuss concerns, review contracts, and specify where you need their help to protect your interests. They’ll ensure all necessary clauses are in place before you sign any contracts.

Ensure you meet all bank conditions by working with your mortgage adviser, lawyer, and other experts like building inspectors. This step ensures a legally sound purchase in line with your loan conditions. Ensure the property is insurable by checking with an insurance company before your offer becomes unconditional.

Once your Sales and Purchase Agreement is confirmed, your Mortgage Adviser will create a suitable loan structure based on your goals, secure a special interest rate, and finalise your loan. The bank’s legal documents will be sent to your lawyer for review.

As you complete these final steps in the home buying journey, you’re on the brink of moving into your new home and starting this exciting chapter of your life.

Contact Achiva Today

When you choose to work with Achiva’s Experienced Mortgage Adviser, you’re choosing a smoother path to homeownership. Our expertise is your trusted guide through the complex home loan process.

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