First Home Purchase

Step 1: Saving for Your Deposit

A deposit is the initial amount required to secure a home loan. In New Zealand, most banks require a minimum 10% deposit, though some lending options allow purchases with as little as 5%.

Ways to Save for Your Deposit:

• Personal Savings – Establish a budget and save consistently.
• KiwiSaver First Home Withdrawal – If you have been a KiwiSaver member for at least three years, you may withdraw nearly all of your balance (except $1,000) to contribute towards your home purchase.
• First Home Grant – Eligible KiwiSaver members may receive up to $10,000 ($5,000 for an existing home or $10,000 for a new build per eligible person).
• First Home Loan – Certain lenders, with government support, offer loans that require only a 5% deposit.

Step 2: Securing Mortgage Pre-Approval

A mortgage pre-approval gives you a clear understanding of how much you can borrow and strengthens your position when making an offer.

How to Get Pre-Approved:

1. Choose a Mortgage Broker or Bank – A mortgage broker can assess multiple lenders to secure the best deal for you.
2. Prepare Your Documentation – Lenders will require proof of income, expenses, savings, and existing debts (such as payslips, bank statements, and identification).
3. Submit Your Application – The lender will evaluate your financial profile and creditworthiness.
4. Receive Pre-Approval – This provides a defined budget for your home search and is typically valid for 3 to 6 months.

Step 3: Finding the Right Home

Once pre-approved, you can begin searching for a home that fits your budget and lifestyle.

Key Considerations When House Hunting:

• Set a Realistic Budget – Stay within your pre-approved limit.
• Choose the Right Location – Consider factors such as proximity to work, schools, transport, and local amenities.
• Browse Property Listings – Websites like Trade Me Property and real estate agency portals provide up-to-date listings.
• Attend Open Homes – Viewing properties in person will give you a better understanding of the market.
• Conduct Due Diligence – A building inspection and LIM (Land Information Memorandum) report can help identify any potential risks or hidden issues.

Step 4: Making an Offer

When you find the perfect home, you’ll need to submit an offer. In New Zealand, properties are typically sold through:

• Private Sale – You negotiate the purchase price directly with the seller or their real estate agent.
• Auction – You bid against other buyers, with the highest offer securing the property.

Types of Offers:

• Conditional Offer – Subject to conditions such as securing finance, obtaining a satisfactory building inspection, or reviewing the LIM report.
• Unconditional Offer – No conditions apply (often required for auction purchases).

Step 5: Finalising Your Mortgage

Once your offer is accepted, your lender will complete the final approval process before issuing the home loan.

Final Steps Before Settlement:

• Confirm Your Loan Structure – Decide between a fixed-rate, floating-rate, or a combination of both.
• Review and Sign Loan Documents – Your lawyer will guide you through this process.
• Arrange Home Insurance – Lenders require insurance coverage before finalising the loan.

Step 6: Settlement & Moving In

On settlement day, your lender will transfer the purchase funds to the seller, and you will receive the keys to your new home!

Essential Moving Tips:

• Plan Your Move – Arrange movers or hire a rental truck in advance.
• Update Your Address – Notify your bank, employer, and utility providers of your new address.
• Celebrate Your Achievement! – Owning your first home is a huge milestone—enjoy the moment!

At Smartmortgages, we specialise in guiding first-home buyers through the mortgage process with expert advice and tailored solutions. If you’re ready to take the first step towards homeownership, get in touch with us today!

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