First Home Buyers
HOW MUCH CAN I BORROW?
First Home Buyers
- If you are looking for 95% borrowing then you will need to be able to prove that your 5% deposit is from genuine savings. This can be proven in several ways
- Savings in your account over a period of no less than 6 months
- If you have been with KiwiSaver for a min of 3 years then you can use your eligible contributions (please check with your fund manager regarding your own eligibility)
- If you can prove that you have sold a car or other asset and that the money has gone into your account and remained untouched i.e. no withdrawals
- Every bank has their own mortgage calculators
If you are borrowing at the top end of our estimate then we suggest setting up a bank account so that your savings (+rent) equate to the mortgage repayments once you buy. That way you can gauge whether your mortgage is realistic.
It is great to get disciplined about making regular payments and to try living with your mortgage before buying.
The more deposit you have the lower the cost of borrowing. Ideally you will have a 10% saved deposit (but we can work with as little as 5% as long as it is saved.) The other 5% can come from family gifting. Borrowing over 90% is much more difficult and much more expensive.
We don’t advice using a guarantor and most banks don’t accept guarantors these days either.
If there is no family gifting available then another option is to borrow the deposit funds from parents who may have a revolving credit facility with funds available. We would factor in the payments so that your bank is fully aware but since they’d be only lending 90% rather than 95% this will reduce your costs substantially.
Another factor is income, if you have any dependants, what other personal loans you have, Student loans etc
Can I borrow while overseas?
Non Residents can borrow up to 80% LVR but some banks still only go to 70%
The banks have fewer issues with Aussies and New Zealanders or those with NZ residency but lending is available for all nationalities. The LVR may be reduced though.
Do allow more time to obtain finance. It will pay to ask us to provide a pre-approval so that you can purchase confidently when you find a property. Do be aware that a pre-approval is not the same as an unconditional approval