5 November 2020
Tips for first home buyers
Ready to make the commitment of buying your very first home?
It’s an exciting and overwhelming decision to make – especially for a first-time residential home buyer. As you enter the property market for the first time, there are a few things you should know before diving in headfirst.
What are you looking for?
The type of property and where it’s located are the first key things to decide on, as that will help to narrow down your search.
Everybody is looking for something different in a house, and what you’re looking for tends to be determined by your current situation. Is it somewhere you want to live now and then turn into an investment? Or are you looking for a family home? Do you want something modern? Or a fixer-upper?
Where do you want to live? In the city? On a lifestyle block? Close to work? Near schools?
Set your budget
Before you begin house hunting, it’s important to understand what your budget is. Don’t get ahead of yourself by looking at properties before you’ve decided what price range you should be looking in.
It’s also advisable to make sure you have some extra money set aside to pay for LIM reports, builder’s reports, lawyer’s fees, property valuations and moving costs.
Once you’ve set a realistic budget, you can start hunting for the right home that suits both your budget and your needs.
Gather your deposit
We’re not going to suggest that you to give up avocado on toast or tell you about how easy it is to buy your first home if you swap your morning latte for a cup of instant coffee. You know that stuff already, we get it.
However, if you’re a first home buyer and you’re serious about buying a house, you’ll need to get smart about your financial situation.
While you may have money in the bank, many first-home buyers can also receive funds from external sources to help secure the purchase of a home.
In May 2020, the Reserve Bank temporarily removed loan to value ratio (LVR) restrictions, freeing banks to offer mortgages to buyers with small deposits.
Since June 2020, lending to investors has tripled and last month banks lent out more than $7.3 billion to house buyers – which is a record.
Help from the government
You may be able to get government help to buy your first home. If you’re a Kiwisaver member, you may have the opportunity to access your savings to put toward the deposit for your first home.
If you’ve been a member for at least three years, talk to your KiwiSaver provider to see whether you’re eligible for the KiwiSaver first-home withdrawal.
Another option for KiwiSaver members is the HomeStart grant. If you’ve been making regular contributions over a three-year period, you may also be entitled to this grant.
Before you start looking at homes, get a team of professionals to support you and to answer any questions you might have.
You’ll need to find a lawyer or conveyancer, and your wider support crew might also include a building inspector, a bank or mortgage broker, and an insurer.
You may even have some of these people within your circle of family and friends!
Hitting the market
With all the steps in place, it’s time for the fun to begin. Time to hit the market!
As you start your search, you will find that there are a variety of avenues to look for properties through. From traditional media sources, such as newspapers and window displays, to social media campaigns.
Go in with an open mind when you view properties and look for the potential to make it your own.
Talk to the Waikato real estate experts at Lugtons, and maybe even enlist the help of a buyer specialist.
Having a trustworthy real estate salesperson on your team will help you through the home buying process, help you to gauge a better understanding of the market and give you peace-of-mind on your decision.