4 life saving tips to minimise frustrations when buying your first home

I remember the first time my wife mentioned to me that we should start thinking about purchasing our first home. I’m a very conservative personality, so my first reaction was, “how are we gonna do that? Where do we even begin?” We’ve all been there before right? Where a task that lies ahead of us seems daunting and intimidating. Well, I’m here to help you along the way. What seems like a massive mountain to tackle, is actually a series of small steps that lead to an amazing destination.

Here are the top four tips that will make life a lot easier when you are considering purchasing your first home.

  1. Can you afford it?
    1. I know, I know… this seems like common sense right? But the reality is often most people don’t realise all of the costs involved in home ownership. For example: Have you thought about how much the rates are going to cost? How about insurance? What about solicitor’s fees? And if you have less than a 20% deposit, Low Equity Premium fees? Annual maintenance costs? Etc. All of these can add up to thousands and thousands of dollars. However, nothing to worry about if you are aware of, and prepared in advance for these costs.
  2. The paperwork nightmare!
    1. Banks want to know everything about your financial history. What does that mean? You are going to have to gather a lot of paperwork to show that you are a responsible and trustworthy borrower. Makes sense though right? Wouldn’t you want to know everything about the borrower if you were lending upwards of half a million dollars or more to someone? So be prepared. Have your paperwork ready for that first meeting with your broker or banker. Here’s a short list to help you start preparing.
      1. 3 most current months bank statements
      2. 3 most current months payslips
      3. Copy of your ID (passport, driver’s license)
      4. Last 2 years financials if you are self employed
  3. Number discrepancy
    1. Now, we’ve all been on the websites to see how much we can afford right? Here’s a little golden nugget to save you from becoming frustrated later on. Those websites are NOT the bank! Banks pad the interest rates and margins in order to make a safer bet on a borrower. Here’s an example: on the website we can type in that super low interest rate for qualifying, but the banks don’t use that rate! Yep, you heard right. They use a cushioned rate upwards of 6% or higher to qualify you. Why? Because then they know you can afford the payments if and when the rates go up. They’re in it for the long run, so they need to know you can afford those payments in the long run.
  4. Apply for KiwiSaver withdrawal and HomeStart Grant EARLY!   
    1. On average, these processes can take upwards of three to five weeks to get confirmation from the providers. Head on over to the KiwiSaver website and the Housing NZ website to gain access to the applications.
    2. Bonus tip: Make sure you follow through with the HomeStart grant process. Send them the required documentation (sales and purchase agreement, etc). This is something that you have to do yourself, not your broker or solicitor.

I wish I had known these little tips when we bought our first home. It would have saved us a lot of headache during the process. I would encourage you to have a good conversation with your broker. Ask questions. If you are a personality that likes detail and processes and would like to know everything that is going on, then tell your broker or banker that. We will communicate as much or as little as you prefer. The key is communicate. Ask questions and be prepared. Then, sit back and enjoy the journey to owning your first home!

Chris Martinez

Chris Martinez

Chris has a deep passion for teaching and business currently holding a Bachelor’s degree in Education and a Master’s Degree in Business Administration among other certifications.
Chris Martinez