With house prices skyrocketing beyond the income of the average New Zealand household the idea of building up the resources to purchase a new home can feel pretty daunting.
For those of you with a five-to-ten-year timeframe one of the best vehicles for getting around this is a combination of both managed funds and KiwiSaver. An important consideration with this approach is ensuring you have the right investment mix for your risk tolerance and time horizon, information of which you can found here.
Also, Kariang Ora provide government support for those not quite where they want to be with their deposit:
1. First Home Grant- Up to $5000 each for an existing home and $10,000 for a new home.
2. First Home Loan Scheme- Instead of the 20% deposit usually needed they offer a 5% alternative.
When you pull together the cash you need, the process can then be broken down into five steps.
1. Finance– Budget, save, and consolidate. Conservative simplicity is the key to staying out of deep waters.
2. Find– When making this decision it’s important to understand your first home isn’t going to be your last. Starting humbly with a focus on location, proximity to public transport, shops, and schools as well picking a home comfortably in your price range will do more for your financial future than the feel-good factor of having the best house on the block.
3. Fix– Get a pre-purchase inspection in the form of a full builder’s report and a new LIM. LIM more commonly known as Land Information Memorandum will outlay the issues with the land and the report will provide insights about the building.
4. Fence-It’s always better to build a fence at the top of the hill than clean the mess up at the bottom. Before signing a mortgage, sale agreements and transferring ownership it’s important to have a lawyer give it the once over.
5. Fund- The common ongoing costs are rates, maintenance, insurance (home, contents and mortgage) and body corporate fees for those apartment friendly folks not wanting to deal with maintenance. If you decide to dip your toes in the apartment world once again make sure the lawyer gives the paperwork the stamp of approval and they it includes a fund for major maintenance just in case.
