NEXT HOME BUYERS
Growing financial futures
Moving to meet growing family needs, fit into new school zones, to get that pool or downsize for a different pace of life is an exciting time. Not only is it a great time to get the home you’ve been dreaming of, it’s also an ideal time to make sure your home loan is best suited for your evolving lifestyle. Let us explore your options and make it easier to get you into your next home.
By now you’re no novice when it comes to home lending. You’ve probably fixed, floated, paid-down, topped-up and revolved. However, changing properties is often a lot more complicated than buying your first home. Should you buy first or sell first? Should you sell at all? That’s where we can really help.
Should you buy first or sell first? Should you sell at all?
Like a lot of things in life, when it comes to buying and selling your home it’s all about timing. In an ideal world, you would be able to sell your existing home and move into your new home on the same day. However, we realise that this isn’t always the case; and that the most important thing is to maintain a roof over your head throughout the process.
Bridging finance is a timing mechanism that can provide flexibility between buying and selling and may be a great option for you. As part of the process you will need to consider when your property will be ready to sell, how long it will take to sell and how much it will sell for.
There are many moving parts to consider with bridging finance, including what you do with your existing loan. We’ll talk you through your options which may include moving your existing loan to your new property, it’s also a good time to review your loan structure.
Perhaps you’re in a situation where you don’t need to sell at all? You loved living in your home, perhaps someone else would? Maybe their rent and your equity can turn your old home into your first investment property.
Renovating your existing home
While buying your first home is exciting – eventually you’ll find yourself getting antsy about your next property move – Kiwis just can’t help themselves. Is the kitchen out-dated? Is one bathroom really enough? What would a study be like for the kids?
Moving to a new home isn’t always the solution – so instead, renovating by knocking down walls, adding extensions and installing a new kitchen is often the better solution. When renovating, it is critical to have the right finance in place – but with so many options, it pays to have us help guide you through the process.
In some cases property owners will be able to redraw any additional payments they’ve made on their existing loan to cover renovations. In other cases you will need to apply for a supplementary loan and draw on the equity you have built up in your home or investment property over time. Knowing the intricacies to fund and complete your building project is what we do best.
Building your own home
Building your own home can be a highly rewarding experience- you get to choose the land, the materials, the style of house and even the drapes this time! That said, it takes additional time, can cost more and can cause additional stress with all the additional decisions that need to be made.
Just like no two homes are the same, so too are banks when it comes to financing the construction of them. Each bank has a different set of criteria as to how much they will lend and the process involved in getting funding to complete your project. Some will require anywhere from 10% to 35% of the total cost as deposit. Others will look at the end value and work backwards from there.
Turn-key, fixed and labour-only contracts are another consideration. It can be about as confusing as choosing those tiles for the ensuite! Being organised and having a structured plan is key to obtaining a successful build.
That’s where we can really help. Think of us as your financial architects in the process. We work alongside the banks and builders to help facilitate the funding of the project. We’re in your corner for every step, nail and hammer of the journey.
Handy calculators and resources to help you into your new home
Quirky Bird's Top Tips
- Have been contributing the required minimum amount to KiwiSaver for at least three years
- Be 18 years of age or over
- Be purchasing or building your first home
- Have a household income (before tax) of less than $80000 per year (for one person) or less than $120000 per year (for two or more people)
- Have a deposit that is 10% or more of the purchase price including the addition of the grant
- Plan to live in the house for at least 6 months following settlement or completion of the property
- Try living like you would need to with a mortgage for 3-months. Proving this possible goes a long way towards your mortgage success.
- Know your budget- what you can afford and where.
- Don’t forget to factor in additional costs such as legal fees moving costs rates and insurance.