First time home buyer stress: 5 tips to help you manage the process for a better outcome

When it comes to stressful life events, buying your first home is up there in the top ten. There are so many hurdles to jump, including securing a mortgage, finding the right home and going to auction. Often, it’s an emotional rollercoaster, with many first home buyers experiencing plenty of sleepless nights. However, planning and preparation can go a long way to alleviating the anxiety. Here we share some tips to help you manage the process for a better outcome.


1. Know how much you need for a deposit

Most first home buyers need to have a deposit that is 20% of the property’s value. So, for a house worth $500,000, you are looking at a deposit of $100,000.

If the deposit you have saved is less than 20%, it’s still possible to get a loan. However, current loan-to-value restrictions make this a tricky process. Furthermore, you may be able to use your KiwiSaver to help finance a deposit. Your Mortgage Adviser is best placed to give you expert advice on your situation.

And there are plenty of online tools available to help with budgeting. Use these to identify savings you can put towards your deposit. Such as:


2. Find out your borrowing capacity

Next, you need to find out how much you can borrow. Your borrowing capacity is based on your income, expenses, family circumstances and debt levels. Knowing your borrowing capacity helps narrow down your search to only homes that you can comfortably afford only. Feel free to contact us to work out your borrowing capacity and/or learn ways to improve it.


3. Identify the right loan for you

Identifying the right mortgage can be daunting. There are so many products out there offering fixed or floating rates. And many banks also have special loans for first home buyers. It’s not easy selecting the right option. The mortgage access team can help you make sense of it all. With access to over 15 lenders, we will support you in finding the perfect solution.


4. Get pre-approved

A pre-approval is confirmation from a lender on how much they are prepared to lend. Pre-approvals generally last for 3-6 months, which means you can confidently start doing the rounds of open homes. It also allows you to act quickly should you find that dream home tomorrow.


5. Be auction ready

Nationwide up to a quarter of all properties were sold under the hammer in June. And in some parts of the country, such as Auckland and Bay of Plenty, that percentage was even higher. In addition to the steps above, being auction ready involves getting a building inspection and LIM report in advance.

Furthermore, regardless of whether you buy at auction or by negotiation, you need a lawyer to check the sale and purchase agreement. Save yourself time and hassle by identifying one beforehand. Seek recommendations from friends and family. Or ask the real estate agent about local lawyers who can help.

Buying your first home is stressful. However, picture yourself celebrating with your favourite people in your fantastic new home. That vision, plus careful preparation and the support of your Mortgage Adviser, goes a long way to minimise anxiety.