Starting out on the home buying journey is exciting, but it can also be a bit daunting. Here are some tips for getting a deposit together for your home.
Save a regular amount of your income as you get paid. We can help by setting up an automatic payment to transfer money from your transaction account to your savings account every pay day.
A good savings history could help when applying for an ASB home loan as this is something we will consider when you apply. Establishing a budget, and sticking to it, may also help you to save regularly and figure out what level of mortgage payment you are comfortable with.
Once you’ve worked out how much you can afford to save and what your savings goal is, the next step is to determine the best savings account to help you achieve your goal.
If you’ve already got some money saved up, you may want to put your money into a fixed-term investment account.
After three years of saving with KiwiSaver you may be able to make a KiwiSaver first home (or previous home owner) withdrawal to help buy your first home.
There are eligibility criteria and other requirements you’ll need to meet. You’ll find these here. A solicitor or conveyancing practitioner can also advise you on this.
You could be eligible for a KiwiSaver HomeStart grant of up to $5,000 to purchase an existing home, or up to $10,000 when building or purchasing a new home.
If you’re building or purchasing a home with someone else and they are also eligible, you could get up to $20,000 between you. Check here to see if you and the property might be eligible.
Getting help from your family could enable you to get into your own home faster. There are some things to consider though, so we suggest you get independent legal advice before deciding your next step.
With this option, your family member becomes a guarantor and guarantees to the lender that your loan will be repaid. Their own home may also be used as extra security for your loan.
You need to be aware that your family member’s property is potentially at risk if you (or they) don't make your loan payments. You’re primarily responsible for repaying the loan, but if you don't, your guarantor will be asked to make the payments on your behalf.
Providing a guarantee is a serious decision and any guarantor should get independent legal advice.
Getting a loan from family could be a good idea if you’re finding it hard to get a deposit together. However we’ll need to make sure you can service both loans.
Typically a lender will ask for written evidence of this loan. This can be a good thing as it ensures the terms of the loan are clear to everyone. Talk to us if your family arrangement grants them a security interest or charge over the property as you will need our consent. We will need to assess this on a case by case basis due to the Reserve Bank of New Zealand loan-to-value restrictions.
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The above information is a guide only and should not be relied on as it does not take into account your personal financial situation.