So, you're thinking about buying your first home in Queenstown? Congratulations! You've come to the right place. With home loans, deposits, interest rates, mortgages… There's a lot to wrap your head around, and stepping onto the property ladder can seem daunting. A home loan will most likely be your life's biggest (and most rewarding) financial commitment, so it's important to be prepared and do your research. Here are six simple tips to start you on your journey.
1. Manage Your Finances
Saving towards a deposit and getting pre-approval for a mortgage are the first steps to securing your first home. Your spending habits will be put on trial, and months (or years) worth of bank statements will be examined. These documents need to prove that you are a safe investment.
The best way to prove this is to create a realistic budget as soon as possible and stick to it. Take time to look through your income, expenses and debts, and set a savings goal. You’ll have to limit the ‘Treat Yourself’ moments to reassure the bank that you’re good with your money and will keep up with future loan repayments.
2. Understand the costs
Understanding the one-off and ongoing costs associated with buying your first home can help you create savings goals and ensure you borrow within your means. You can use online mortgage and savings calculators to determine how much money you can afford to borrow without reducing yourself to 2-minute noodles for the next 30 years.
When you're crunching the numbers, make sure to include costs such as lawyer's fees, insurance, rates, moving costs, LIM reports, body corporate fees, etc.
3. Check your eligibility for first-home support schemes
When buying or building your first home, check to see if you are eligible for grants, loans, or government support schemes. Depending on your circumstances, you can apply for a First Home Loan, which allows you to put down a 5% deposit rather than 20%. You may also qualify for a First Home Grant, which contributes up to $5,000pp towards an existing house or $10,000pp to build a new one. Every dollar counts!
KiwiSaver is also your best friend. If you've contributed for over three years, you may be eligible to withdraw your funds. These support schemes can significantly shrink the amount you need to save for a deposit and are a great way to get you onto the property ladder faster.
4. Find the best home for you
Buying your dream house with an indoor cinema, backyard pool, and modern kitchen sounds great, but it’s probably not a realistic choice for a first home.
Before you even start looking at homes, ask yourself:
- What kind of property am I looking for? (House/apartment/land)
- What do I need in a home? (Sunlight/backyard/transport/school zones)
- How long will I be living in this home?
- What can I afford?
- Am I ready for this commitment?
Take time to answer these questions honestly and weigh up your needs versus your wants. Then, create a list of non-negotiables and go from there.
5. Do your research
When you’re looking to spend hundreds and thousands of dollars on a home, it pays to do your homework. Understanding how the real estate market works will empower your buying decisions. Your lawyer can help you with this.
Utilise real estate websites like Trademe, homes.co.nz, or OneRoof to find the latest property and market insights. Information on property values, auction results, school zones, valuations, community facilities, and much more can all be found online.
6. Seek Advice
Getting help from property professionals is the easiest and safest way to buy your first home. Before you start your property journey, invest in a support crew. Your crew should include a lawyer, insurer & financial advisor. Having experts by your side will ensure you make the right choices and avoid costly mistakes.
Here at Queenstown Law, we have a range of property services and a team of experts waiting to be part of your crew. We can be your property wingmen, who handle the legal paperwork, minimise risk, offer advice, and take the stress out of the property transaction process. From the moment you start searching for a home to the day you close the deal, we can help.
So, come and talk to us today and let’s start your first home journey together.