If purchasing a house is the plan, it may seem a bit daunting knowing where to start.
You will more than likely need a deposit, so saving, saving, saving is probably where you are right now. The banks love to see you are on a stable income, and also that once you own a home, your spending habits are in keeping with paying back your mortgage every week.
So how do we do this?
Creating a regular savings routine
Demonstrating a consistent savings habit speaks volumes to potential lenders. KiwiSaver is a great example of this, as each pay you and your employer will be contributing to your account. Plus, if you are eligible for the government contributions each year, your nest egg will begin to look rather healthy.
Secondly, set up an automatic payment of any surplus after all your expenses (living costs and debt repayments) have been paid. Put it in a savings account which will show the lender you are serious about saving. It also helps the urge to splurge come payday.
Review your KiwiSaver
Did you know that you can apply to withdraw your KiwiSaver savings and use it towards the purchase price of your first home? You are eligible for a first home withdrawal if you:
- have been a KiwiSaver member for at least three years;
- have not made a withdrawal from your KiwiSaver account for the purchase of a home before;
- intend to live in the property;
- are buying your first home (or have confirmation from Kāinga Ora that deems you equivalent to a first home buyer); and
- have no current/previous invested interest in property or land.
Review your KiwiSaver with one of our KiwiSaver Advisers. They can ensure you are putting an appropriate amount into your KiwiSaver and investing in the right fund to reach your savings goals.
Tackle debts and scrutinise expenses
Paying off any outstanding debts is really important in validating your financial situation. Personal loans, like a car loan, credit cards and Afterpay debts can impact getting a mortgage approved. Make sure you prioritise these debts. Talk with one of our Mortgage Adviser’s to put in place some strategies so your situation looks more appealing to the lender.
Lenders look at your recent expenditure patterns during the application process. By identifying and rectifying any recurring expenses that might raise concerns, your application will be looked upon favourably.
You don’t have to figure this out alone
At Cole Murray, our KiwiSaver team can help you understand your options and choose the best fund for your goals. We can also check if you qualify for a KiwiSaver withdrawal to buy your first home.
Our expert Mortgage Advisers can help you secure a mortgage for your first home. Their service is usually free because they’re paid by the lender. They’ll guide you through the process, making it much smoother with their knowledge and experience.
Ready to get started? Talk to us today!
Image: Photo by Andrew Mead
