First home buyers

First home buyers- do I need a 20% deposit?

We are getting this question if not daily certainly weekly. It is an issue that is constantly changing thanks to the banks and the Reserve Bank.

The current rules are that banks when they have the funds, can lend over 80%, but this must amount to no more than 15% of their loan book. If the home buyer is buying a new property from a developer the Reserve Bank rules do not apply, but the banks will see if it meets their own lending criteria and it will usually be based around income and ability to service the debt.

As you can imagine, the banks will pick the low hanging fruit first, so it pays to make sure that your credit history is good and that your loan application is packaged well and makes the bank want to say Yes.

If you are using KiwiSaver funds to help with the purchase, which most of you are, then please make sure you allow at least 10 working days prior to settlement for your Kiwi Saver provider to forward the funds to your solicitor.