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First Home Ownership is Achievable
Owning one’s own home is a dream of many New Zealanders. With house prices creeping up again the window of opportunity for first home buyers may be slim. We asked specialist residential mortgage broker Ian Wood from Investalink for his advice.
Make a plan. Your next step will be to formulate a plan that will enable you to achieve your goal. Without a plan your goal will also just be a goal so it is this plan that can bring it to reality. One of the first things you may need is to save a deposit. Work out how much you need to save. Work out how you will save this money and then how long it will take to reach your target. Keep in mind that the longer you take to save the more you will possibly need as property prices may also increase, therefore requiring you to contribute a higher deposit. At this point it could be helpful to do a budget so you know exactly where your money is being spent and what areas you may be able to trim back. You might be surprised. Kiwisaver is a great saving scheme for first home buyers and offers additional incentives in the form of the first home buyer grants. However, it would pay to seek advice as to whether this is the right option for your situation.
Know you’re potential. How much can you afford? Will you be eligible for a mortgage? Will your deposit be enough? Is there anything that you need to do in order to prepare yourself for mortgage approval? These and many other questions need to be assessed early on so that you can incorporate any changes into your plan. As most people have very little idea about current lending criteria you are better to talk to a mortgage broker early on so that they can guide you as to what you may need to do. The advantage with using a broker is that they are working for you, not the bank. In most cases there is no cost for their services as the banks pay them via a commission structure but they will work hard to get the best loan for your situation. A true broker will represent many lenders, some of whom are only available via the broker network and a good broker will be aware of the different criteria of each of these lenders. By talking to a broker early on they should be able to assess your ability and assist you as you work towards your goal of home ownership.
It has never been easy. While some people may be fortunate enough to earn very high incomes or have wealthy families that have been able to assist them, for most people it is a long hard slog. However, don’t let that put you off. With a bit of hard work and effort you could purchase your own home and enjoy the added wealth associated with it. Keep in mind that it has never been easy for first home buyers. I’ve spoken to some older folk who told me that they worked at 2 jobs in order to purchase their first home so I’m not sure that it’s really any harder nowadays. With a bit of determination and the right advice most people can become home owners.
Look for bargains. Most property investors use this strategy in order to build their equity quicker but first home buyers could do this also. Look for properties that could be bought for less than their current valuation. Perhaps it’s a mortgagee sale or the owner is financially stressed and needs to sell quickly before it does become a mortgagee sale. Or someone may need a quick sale because they have been transferred or are moving overseas. Or look for houses that may be a bit shabby or have been slow to sell because they are a bit messy or have some feature that puts most people off. If that negative feature could be easily addressed or the house could be tidied up without too much cost you may be able to make a sizable equity gain and use this increase as a larger deposit toward your dream home. Your first home may not be a palace but by using this strategy it may enable you to get into the property market sooner and then trade up using the equity you have created. There will be some cost and/or hard work involved but the reward is worth it.
If you require personalized advise for your situation Ian can be contacted via their website httl://www.investalink.co.nz
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A mortgage broker service for clients purchasing property in New Zealand. We will find the best home loan to suit each clients situation.