First Home Buyers – Your country needs you!

First Home Buyers – Your country needs you!

Most of us want to own a home, after all that is the dream which has been sold to us. So is it possible?

In short Yes, maybe right now, maybe next year or in some cases it might take a bit longer.

I so often hear “ I am paying $550 pw rent and can save another $200 pw, so why won’t the bank lend me the money I am asking for?” The truth is the bank isn’t doing the maths on the interest rate you will likely pay, but instead at least 3-3.5% higher. It wants to make sure that if interest rates rise quickly, you will still be able to make the repayments.

Banks are looking more closely at how you spend your money, so be warned. Discretionary expenditure is being looked at more closely than ever before.

Key Ingredients

Deposit

In Auckland you should work on no less than $75,000 and in most cases $100,000 plus. This can be KiwiSaver, Savings, a pension release, KiwiSaver Home Start grant or perhaps a gift from parents.

Credit history

You should have no black marks on your credit history and your cheque account should be clean i.e. no bounced cheques or unauthorised overdrafts

Credit card debt

This should be minimal and you limit should be as low as is needed. If you never use the limit then ask for it to be reduced as a high limit will count against you.

Personal loans/car loans

Try to keep these under $10,000 it will serve you well when applying for a loan.

Income

This will vary widely, but as a minimum in Auckland you need to be looking at $125,000 p.a. excluding bonuses and other benefits.   The higher deposit you have the lower the required income and vice versa.

Now I come across a lot of people who aren’t quite there and then lose hope, but as I have said to them time and time again, all it takes is a pay rise, two year’s worth of bonus commissions and all of sudden they are there.

All lenders have different lending criteria and their desire to lend will change month by month so don’t assume that because one bank says No, that others won’t say Yes.

If you want certainty so you can go out the weekend after next looking at homes, engage us to apply for a loan to-day.