First Home Buyers – Where to start.Sunday 8 March, 2020
Buying your first home can be daunting. There is so much information to take in and so many people you need to talk to. Your legal provider is an invaluable resource to help you with all things related to the process.
Often, legal professionals are not engaged until after people have signed a Sale and Purchase agreement. The process for buying your home starts a long time before that.
Here are some handy tips/answers to common questions for first home buyers that may help to make the process easier.
Before you start house hunting, it is a good idea to check in with your banker or mortgage broker so that you know what kind of lending could be available to you. Your lender will look at the level of savings you have, kiwisaver, your income, your outgoings and work out how much you could potentially borrow.
First home buyers are eligible to deduct funds from their Kiwisaver to put towards a deposit. To see how much you can put towards a deposit, you will need to contact your Kiwisaver provider and obtain a balance estimate from them. This is an email stating approximately how much you have available. Remember that you are unable to withdraw the full balance and must always leave a minimum of $1,000.00 with your provider.
To access your Kiwisaver funds, you will need to fill out a First Home Withdrawal Application Form online or from your lender. These are only signed after you have signed an Agreement for Sale and Purchase and must be signed in front of a Lawyer or Justice of the Peace. We can help you with this when you have found the home you want to buy
The last thing to do before you get started circling the open home listings is to check if you are eligible for the First Home Grant (previously known as the Home Start Grant). This scheme allows first home buyers to obtain a grant of up to $5,000.00 for an existing home purchase or up to $10,000.00 for a new home or building project purchase. This is a fantastic way to boost that deposit you have been saving.
There are house price and income caps for the Fist Home Grant. You can check if you are eligible and full out a pre-approval application here: https://kaingaora.govt.nz/home-ownership/first-home-grant/check-you-are-eligible-for-first-home-grant/. This is also the place where you can apply to access your Kiwisaver Funds if you have previously owned a home *
A handy hint here is that if you are purchasing with a partner, spouse or another party – you must both complete an application online (even though it may appear that you are completing a joint application).
Once you have all of these things in your tool kit you are ready to get out there and hit the open homes. If you have any questions, please feel free to call one of our conveyancing specialists who can guide you in the right direction. We are here to help.
*and meet the criteria for a second chance withdrawal set out in the eligibility test