Now is the time to buy your first home!
Entering the property market and making your dream of homeownership a reality, can be daunting.
Increased Supply
Now there are a good number of homes to choose from, with a noticeable rise in the number of properties now available on the market over the last few months.
This puts you in a strong position to go and find the right home for you that ‘ticks all the boxes’ and meets your personal needs and preferences.
Competitive pricing tends to follow with an upturn in ‘for sale’ homes. Vendors will likely be more willing to negotiate to sell their home to you when the market is buoyant.
This is particularly beneficial for you as a first home buyer, perhaps working within a tight budget.
Also, the variety of properties available means you have a better chance of finding a home in your preferred location and within your price range.
With more choices to consider, the process of finding your dream home can become less stressful and more satisfying.
Financial Benefits of Home Ownership
A significant long-term financial benefit of homeownership is the ability to build equity over time.
Mortgage payments are made up of an amount which goes towards reducing your loan balance, effectively increasing your ownership stake in the property. This means that you are effectively contributing to your financial future.
Whereas when paying rent, there is no return possible.
Property values in New Zealand have historically appreciated, so the equity in your home can grow quite substantially.
The increasing equity can provide a financial safety net, by valuable options such as borrowing against it for future investments like the purchase of a rental property or significant expenses like renovations to your home which you may wish to do in the future.
Owning your own home can make your expenses more predictable, as you would no longer be exposed to potential rent increases.
Over time, building equity in your home not only increases your net worth, but provides a sense of security and financial freedom.
Lender Preapproval
Getting pre-approved for a home loan is an exciting achievement, but the journey to homeownership doesn’t stop there.
For a smooth process from pre-approval to moving into your new home, it’s crucial to choose a lawyer.
A lawyer plays a key role in any property transaction, helping you access KiwiSaver funds for your deposit (if applicable), reviewing the sale and purchase agreement, as well as checking the property’s title and Land Information Memorandum (LIM).
They also manage essential tasks such as mortgage documentation and the transfer of funds.
Budget Essentials
Aside from your mortgage payments, you’ll need to budget for rates, insurance, and potential ongoing maintenance.
It’s also wise to set aside funds for due diligence, which includes obtaining a builder’s report and possibly a property valuation.
A builder’s report, while not always required by lenders, can reveal potential maintenance issues or structural concerns. Meanwhile, a valuation is often necessary for low-deposit loans, private sales, or new builds.
It’s also important to meet any conditions attached to your pre-approval. Some conditions, such as reducing credit card limits or providing proof of additional income, can be addressed ahead of time to avoid stress later.
Always keep in mind that having a pre-approval doesn’t guarantee you can purchase any property. Restrictions may apply, such as limitations on studio apartments, leasehold properties, or homes requiring extensive repairs.
House hunting itself requires patience and research, so take time to identify the type of property and location that suits your budget and lifestyle. Once your offer is accepted and all conditions are fulfilled, your lawyer will handle the final transaction.
On settlement day, you’ll receive the keys and officially become a homeowner!
By being well-prepared, doing your homework and getting advice from a trusted Mortgage Adviser, you’ll be able to manage your home loan application with confidence.
So, feel free to reach out if you need a hand, or just to have a chat about this, pick up the phone and call 0800 LENDER (536337) or email to [email protected]
