Buying your first home can seem like a daunting task. Before purchasing a home or even starting the process, you are bombarded with news articles about how homes are unaffordable and how long it might take to save a deposit. Not to mention the advice you receive from well-meaning family and/or friends who are not always best placed to offer such advice.
We quite often see and hear (both in the media and from existing clients) misconceptions about getting on to the property ladder, or about the property market in general. One of the most common comments we hear is that you need a 20% deposit in order to purchase a home. In Auckland, a 20% deposit can be a significant amount of money (it was previously reported that it would take an average Auckland couple 16 years to save a 20% deposit). This is simply not true. Banks are still lending to applicants with deposits of less than 20%. Although finance can be more expensive when you have a lower deposit, and banks have stricter lending criteria, many aspiring homeowners can still obtain finance with a smaller (than 20%) deposit.
The media has frequently asserted that in order to buy a home in Auckland, you need to be high income earners, which is not necessarily true. Expenses are also factored into the equation and clearly if you have excessively high expenses (and existing debt) you will need more income to account for mortgage debt servicing. We have helped a number of couples on little more than the average wage into their first homes.
Our best advice for aspiring first home buyers is simple: be prepared and get meaningful, targeted advice well in advance of the time that you would like to buy.
Even if you don’t think you are in a position to purchase a home just yet, getting in touch with a Mortgage Adviser and seeking advice will help position you for when you are ready to buy. Mortgage Advisers know what the banks are looking for and can make suggestions and recommendations designed to strengthen your loan application and enhance your chances of getting finance. You might even find, as some of our clients have, that you can buy a home earlier than what you thought was possible.
If you’re thinking about buying your first home (now or in the future), get in touch with us for a chat. Our expert advice is free, completely objective and may very well enable you to buy your first home much sooner than you thought possible.