First Home Buying Guide (Updated 2022)

by Dev Dhingra

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Dec 7, 2021

Hurō! He mihi nui ki a Koe! So, finally, you are ready to buy your first-ever dream home. Purchasing a home is both an exciting and intimidating task. As it’s one of the most crucial decisions of your life hence, assistance of a financial adviser seems crucial as they can assist you in your home-buying journey. Experienced financial Advisers have profound knowledge concerning mortgage broking which can help the new home buyers conduct the buying process without much hassle. Here’s a guide that can assist in your prospect of purchasing the first-ever dream home.   

Chalking Out a Master plan: The First Step 

Before you begin planning to find a Cozy house which is within your affordability, let’s introduce you to some of the major components in the first home buying process. 

Consider your options 

Are you planning to start a family? Is your old home not worth your emerging needs? If yes, then try choosing a property based on your specific purpose. See, each of the options has its own pros and cons, in case of confusion, talk to an adviser as they can help you choose which property suits your goals.  

Understand your finances 

Another crucial step towards your dream begins by understanding the total amount you can save on deposits as well as checking your affordability. If you have no idea how much to save or what’s your affordability limit, then talk to an adviser who can make difficult budget planning less complex. Here are some tips on saving which you can follow. 

  • Calculating repayment can be a stressful task in case you try carrying it out on your own. Some brokers like Fundmaster have designed mortgage calculators that can help to resolve the issues concerning repayment calculation. See, interest rates are never static, to assess how much you will spend on repayment based on changing interest rates; the technically efficient mortgage calculators can be a great help to you.  
  • If certain differences lie between the amount you are paying for rent and that of mortgage repayment, then it’s crucial to save some amount as a part of regular savings.  
  • Banks generally lend money based on the value of a property. First-time home-buyers need to gain insight into Loan to Value ratio. It can be defined as the ratio between the value of a mortgage to that of total property value. To know the current LVR rates, consult a reputable mortgage broking adviser. 
  • Issues on credit reports should be resolved before you begin the purchase process. Banks don’t move forward with loan applications of customers with low credit scores. The financial advisers can assist borrowers with their issue-ridden credit reports.   
  • With the rising prices of property, NZ government is using Debt-to-income ratio limits to achieve property price stability so that the first-time buyers face no issues. To get details on the current debt-to-income ratio refer to the Reserve Bank website of NZ (https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Statistics/tables/c40/Debt-to-Income-new-series.pdf?revision=799ce235-94b5-4f7f-89bc-50dd3b42b8c0)   

Property Research: Another Crucial Step 

Finding the right property requires adequate research on the history, location, building materials, and also analysing a property’s vulnerability in terms of natural hazards. To make an informed choice, the buyers can take help from a LIM report, a record of title, and property inspections.  

Choose a suitable Location 

Location is another factor guiding your home buying prospect. Generally, people spent days commuting to their workplaces so access to public transportation seems to be one of the important factors in terms of location. Apart from accessibility, appearance can play a vital part because a property located near a park can enhance your new house’s aesthetic value. In case, you have school-going kids, then choosing places near a school can be a desirable option. For more advice on location, you can talk to your nearest mortgage broker, though they are not experts however, can offer valuable insights.  

Understand property ownership categories 

 In New Zealand, property ownership can be categorized into four broad categories that include a cross lease, freehold, unit title, and leasehold. Based on the buyer’s choice of ownership, restrictions may differ. Consult a conveyancer to collect the record title for your new dream home. A record title refers to a legal document that carries descriptions related to the type of ownership, and restrictions a buyer must abide by.   

Get a LIM report:  

A Land Information Memorandum contains a summary of the following information for your reference. 

  • Impact of natural calamities on a property 
  • Information regarding outstanding or current rates 
  • Details related to developments like drainage or roads conducted on the site 
  • Building as well as resource consents 
  • Proper zoning information 

Property inspection 

If the house you choose belongs to the ‘80s or mids-2000’s, the chance of a leaky building might distress you. Leaky buildings can cut a big hole in your pocket, one safe way is a thorough investigation. Buyers can hire building inspectors as they might be able to detect signs of leakage in the building. Alongside hiring inspectors, you can even take advice from registered professionals. 

Gather information about the neighbourhood 

Now, it’s vital for homebuyers because without generating a fair idea of the area future issues may arise. To know about neighbours, arrange occasional visits, communicate with them or you can consult the council for any development details. 

Seek professional help 

 Firsts are always special hence; experienced advisers work on different aspects to make first home purchase less complicated. Generally, budget fixing and availing pre-approved loan is the biggest challenge a beneficiary face. In this regard, consult the advisers who can assess the obligations of a borrower that allows to service a loan. They can also assist you in chalking out a plan for your deposits by checking your income, dues, or total expenditure. 

Reputable brokers try connecting the home buyers with the appropriate lender.  Please visit your nearest mortgage broker if you wish to make the property buying process hassle-free  

Final Thoughts 

With the changing market prices of property, first-time home buyers find it challenging to choose a house that’s under their estimated budget. Well, besides property price, first-time home buyers come across myriads of challenges including financing, checking affordability concerning the estimated budget, and calculating mortgage repayments. Isn’t it all too complicated? Mortgage broking companies like Fundmaster aims at simplifying the mind-numbing task of home purchase for the customers. The first-time home buyers might be interested in securing their property with a good insurance cover so consult any qualified financial adviser who have a good insight into insurance premiums that surely going to assist in the venture to find the right insurance cover for your new nest.  

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Harjeet Singh

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Noor Dhatt

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