First Home Buyers
Property Conveyancing Advice for First-Home Buyers
If you’re a first-home buyer, it’s understandable that you may not know all the steps to buying a house. Although you will be getting excited looking at properties and may be keen to sign a Sale and Purchase Agreement, obtaining expert legal advice early on from a specialist property solicitor will ensure there are no unexpected hurdles on the path to your first home.
Our property law specialists at HomeLegal can guide you through this often-complicated process ensuring you’re informed on both your contractual and ongoing obligations before you sign anything.
Getting ready to purchase your first home
Purchasing your first home can be a daunting exercise. Before you begin looking at properties you need to go through quite a rigorous financial exercise to work out what is going to be affordable and what your deposit requirements are going to be.
The current although often changing Loan to Value Ratio restrictions (“LVR”) require a 20 per cent deposit when purchasing a property to live in. In other words, you must provide a minimum of 20 per cent of the purchase price yourself, excluding any bank lending – lower deposits are possible, so if you don’t have 20 per cent and you want to purchase a house, talk to your bank or broker early on.
Although some individuals can borrow from family, others must depend largely on personal savings.
Our team can provide guidance on deposit requirements including using your KiwiSaver funds, applying for the HomeStart grant from Housing New Zealand or the Welcome Home Loan, and how to incorporate gifting from family or friends.
Calculating the mortgage repayments for your first home
Once you’ve determined your available level of initial deposit, you can then start to calculate your borrowing limit, taking into consideration repayments, costs, property outgoings and rates. We’ll discuss with you any potential costs with the property that you may not have considered. This can include, for example, deferred maintenance, upcoming rate increases or body corporate fees which you should be factoring in.
Many banking websites include helpful mortgage calculators, which can assist in accurately determining what you can afford. Interest-only mortgages are sometimes available which can reduce the week-to-week financial cost of a larger mortgage. Although these mortgages are usually shorter in duration, you’ll need to consider the implications of increased interest costs – and at some point, having to move to principal and interest repayments.
Our team can assist you in reviewing building reports and land information memorandums and offer advice on any questionable areas or worrying discoveries.
Tips for finding a first home in New Zealand
As experienced property lawyers, we know what a difficult time buying your first home can be. If you want to avoid wasting time and money when looking to buy your first property, a realistic understanding of both what is available and what you are able to purchase is vital.
Checking recent comparative sale prices of similar types and locations of properties is a good starting point, and will help you assess how much you may need to borrow, and what timeframe you can purchase within. We can point you to several helpful online resources.
Once you’ve made an honest assessment of your deposit and mortgage situation, you should now familiarise yourself with the property purchase process. See our step-by-step Homebuyers Roadmap for more information on this process, or contact one of the HomeLegal property conveyancing team to discuss the process further.
During our call, you may wish to make an appointment to visit our offices, where we’ll go over the entire process with you, answer any questions, and offer helpful recommendations on building inspectors, valuers and mortgage brokers.
Contact our offices or give us a ring at 0508 HOMELEGAL today and get the advice you need from the experienced conveyancing solicitors at HomeLegal.