First Home Buyer

Buying a house can be both exciting and daunting when you are buying it for the first time.  While you are excited at the idea of owning your own home and not having to pay rent anymore; you also are unsure if this is the right thing to do. You may be nervous about the large home loan that you will borrow from the bank or what the loan repayment cost will be. You may also want to find out which bank offers the lowest and best interest rate. 

 Therefore, it is a good idea to involve a broker like Lending Hub at this stage. We will sit down with you and cover of some key questions even before we start looking at a home loan solution with you.

5critical things to consider when buying your first home:

  • Would you like to buy a new build house or an existing property- Lending rules are different for both options
  • How much deposit do you have- Have you looked at First Home Loans where you only require a deposit as little as 5% and this can be made up of family gift, Kiwisaver or savings
  • We would discuss other First Home Buyers options with 10% deposit
  • Mortgage affordability is not only something that matters at the time of the purchase but for a reasonably long period. Home loans are usually for a 30-year loan term. Although we can not predict all that far out, but it is important to understand how starting a family or going self employed and dropping that income in the future may impact on your mortgage
  • Best interest rate- Although we search for the lowest interest rate and will compare ANZ rates or BNZ rates; but rates will not remain the same when you need to refix the loan in the future. It is important to see your other needs. For instance, some lenders offer special construction loan interest rates for building a new house. Other lenders can offer generous interest rate discount if you are putting green energy systems in your house like solar panels or even offer special rates to purchase an EV. Similarly, some lenders offer you the ability to pay the loan faster up to 20% faster each year, while others may offer you the ability to offset your loan interest cost by putting your savings against the loan. It is therefore important to discuss your loan structure. Should you fix your interest rate or keep some on floating. Other options like an offset mortgage account or revolving loan facility may allow you to save on your interest rate by offsetting any funds that you have in your savings account. Talk to us to discuss these concepts as they can save you a lot of money over the loan term.

Financial Help for the First Home buyers:

First Home Grant

You may be eligible for a government help to buy your first home. As a Kiwisaver contributing member for at least 3 years, you may qualify for this grant. The grant can be up to $10,000 per person or $20,000 for a couple.  Talk to us about the First Home Grant. First time home buyers and some people can qualify under the second chance too.

 First Home Loan

Under the First Home Loan scheme, you only need 5% deposit. Only a few banks are eligible to offer the First Home Loan.  Contact us to find out more.

 FAQs:

  • How much deposit does a First Home Buyer need?

You can buy a house with as little as 5% deposit under the First Home Loan Scheme. Banks can assist home buyers with as little as 10% deposit, however, there are strict lending criteria for such loans. Most banks like to see a minimum deposit of 20% and they offer additional incentives for such loans like cheaper interest rates and cash back. For a new build house, you only need 10% deposit with most banks.

  • Can my parents use the equity in their house to give us a home loan deposit?

Parents can assist their children with the purchase of their first home purchase by using the equity in their house. Lenders can also build some protections in the loan structure to ensure that the parent’s liability is limited to a maximum of the deposit amount of 20%.

  • Which bank should I use for buying my first house?

All banks have special schemes to enable the first home buyers to purchase a house. Sometimes they have special offers for first home buyers like a cash back offer or a low interest rate for a few years. Some lenders have an agreement with the Kainga Ora to assist first home buyers with little deposit. Besides the more well known four banks in New Zealand i.e., ANZ, BNZ, ASB and the Westpac bank. We also have other smaller and local banks like Cooperative bank, SBS etc. We also have other non-banks like Select Home Loans, Resimac, Avanti and NZ Credit union who assist clients with home loans. At Lending Hub, we partner with all of them and more lenders to assist our clients.

  • Should we buy an existing house or buy a new build?

The application process for a new house is different to an old house. Banks are more relaxed on the deposit requirement for a new house. However, new house takes time to build,usually costs more and may not offer as much outside space for the children to play. These are important questions and should be considered right at the beginning of the house buying process. We will discuss these important questions with you.

  • What is the difference between Fixed home loan and Variable home loan rates?

Fixed loans interest rates are locked or fixed for a period. This varies between 1-5 years usually. During this period the interest rate will not change. This provides the borrowers with some certainty of loan repayments. However, it offers little flexibility to pay more on the loan during the fixed period. Variable interest rates offer clients the flexibility to put as much money as they want and when they want on their loan. The compromise they have to make for this flexibility is the uncertainty of their interest rate as it can change anytime. This usually is higher than the fixed interest rate.

  • How can Self-employed people purchase a house?

The assessment for a home loan is different for a self-employed person. This is because there is no certainty of their income particularly if the business is new. Lender will ask for business financials and sometimes the projections to assess their ability to service the mortgage. We work with self-employed clients and would be happy to guide you with your home loan application.