1. Saving/Deposit Options
The first step in buying your first home is to figure out your budget. Sit down and work out your income vs your current spending. Are you spending more than you can afford? Do you need to change your spending habits? After working this out, the next step is to see how much you have saved for your deposit. Additional funds can be gained through Kiwisaver and you might be applicable for a FirstHome grant, where eligible buyers can receive a grant of 10% of the purchase price of the property (capped at $20,000).
2. Pre-Approved Home Loan
It is important to get a realistic picture of how much money you can borrow. Checking with your bank or financial advisor will set you in the right direction. If they like what they see, they can offer you a pre-approval. In principal, this is when they agree to lend you a certain amount of money. The amount of money you can lend depends on the value of the house you are looking to buy from, your income, your deposit, how fast you can pay it back. Having a pre-approval helps you speed up mortgage documentation.
3. Find a Solicitor
This is where we jump in. We at Trollope & Co are your best friends in this process. Having a solicitor is an important part in buying a house. We will make sure all the right processes are followed and no corners are cut. Another task we help with is finding the Land Information Memorandums (Also known as LIM reports), building reports, and property titles. We are here to make the process as easy as possible for you and there to answer any bearing questions you might have.
4. Finding the Right Home
House hunting may be the hardest part of buying your first home. Deciding where to start your first family. There are multiple outlets to find the right home for you. Most properties are listed online. A lot of the properties in today’s market are listed on trade me or realestate.co.nz. If the property is being sold through a real estate agent, then it would be best to visit their open homes for various properties for sale. If the property is sold privately, then it is important that you organise a private viewing. Viewing the house is an important part in buying a home.
5. Get the Home Inspected and Checked Out
Make sure you know what condition the property your planning to purchase is in. Is it in the condition you were expecting? We recommend having a checklist of items to inspect such as insulation, walls and doors, building materials used, plumbing, and so on. We advise to get a specialist to make a report on the condition of the house.
6. Make an Offer
We are here to help you make an offer. All offers have to be made in writing. There are two types of offers:
Auctions are only unconditional offers
7. Offer been Accepted?
Your offer is considered accepted when all parties agree to the terms, price and deposit, and the agreement has been signed by all parties. If it is a conditional contract what terms need to be met to finalise the contract. Great news if all the conditions have been or you have signed an unconditional contract, then you are a new home owner.
8. Figure out your Home Loan Structure
There are different types of home loans and it’s important to understand which loan structure suits you best. Interest rates can be fixed or floating. The upside on having a fixed interest rate is that the repayments cannot go up during the fixed interest period. It also benefits you if you are not planning on paying large lump sums and are not intending on selling the property early. Having a floating interest rate means that it can go up or down depending on the economy. One of the benefits of having a floating interest rate is that you can pay lump sums without penalty.
You might consider a combination of both fixed and floating components to your loan.
9. Signing the Mortgage
Once the loan documents are finalised and prepared they will be sent to us. When signing a mortgage, it is important to remember what you are agreeing to. In principle, you are agreeing to repay all the money you owe to the bank, including interest and fees, paying the legal fees to register a mortgage, rates for the property and to maintain the property, and the list goes on. Approving the priority sum, allows the bank to consider applications for further finance without having to change the mortgage registration.
After signing the final documents, it is official. Congratulations you have bought your first home.
10. Moving into your New Home
Before the big day when you take ownership of your home, there are a number things you need to check out, including, making sure your insurances are up to date. You have completed your pre settlement check of the property. Organised your moving process (Rally up your family and friends!). Have a checklist on what improvements need to be made and whether or not they need to be done before moving in.
After settling in, we hope you enjoy your new home and the neighbourhood, don’t forget to introduce yourself to your new neighbours.