First home buyer fact sheet

Buying your first home can be an exciting time

Owning a home is, for most New Zealanders, how we invest in our future.  It becomes part of our identity.

We take pride in helping New Zealanders buy homes, and we work especially hard to get first home buyers started on the property ladder.

The exceptions to the rule

Let us begin by saying that there are always exceptions to the rules and we specialise in finding them.  So if you don't think you fit the general rules set out below, don't worry too much because it may still be worth getting in touch to see what we can do.  

At the very least we may be able to help you with some advice on what you can do, in the short term, to improve your prospects of buying your first home. 

Your earnings

All the banks and other lenders have 'servicing models' to assess your ability to service (or repay) the proposed loan.  The servicing criteria and calculations vary quite widely, so while you may fail with ABC Bank you may pass with XYZ Bank. 

There isn't any substitute for a personal assessment to see how much you can afford to borrow, but as a first step you may find our borrowing power calculator is a useful start. 

As a rule;

• We will need salary and wage earners to demonstrate continuous employment in the same job, or a similar job, for at least 12 months. 
  
• Earnings based largely on commissions or bonuses may be discounted. 
  
• We will need business owners and self employed workers to prove 24 months trading history in order that we can rely on the average earnings for debt servicing purposes. 
  

Your savings

Your savings will be an important factor in determining what options are available to us. 

The majority of banks and non-bank lenders will consider lending up to 80% LVR with some lenders extending to 90% LVR.  This means your savings will need to be in the region of 10% to 20% of what you intend buying.

Things to consider

Gifted deposit: The term 'gifted deposit' has become fairly common but we prefer to discuss this in terms of "family help with a deposit".  Gifts may be subject to gift duty and gifted deposits could trigger this liability. 

Family or other help: Most lenders will accept a long term interest free loan to you (which is normally loaned by family) as being a suitable substitute for saving a deposit.  Lenders need to be satisfied that your "family loan" will not incur repayments during its term, and demand for repayment of the family loan cannot be made during its term.  Generally, a long term family loan would match the lenders' loan term (up to 30 years).  

Family sometimes help in other ways, for example using their property as additional security or topping up their loan - but it is best that we discuss these options if, or when, appropriate. 

Asset sales: Sometimes it is just better to downsize the car and get on the property ladder.  We understand that this can be a difficult decision, and may not seem economic at the time, but the reality of being in a position to own an asset which appreciates over time (a home) versus owning one which depreciates rapidly (a car) can help the adjustment to selling precious assets. 

The first thing to do

If you'd like to run a scenario past us, we will be glad to give you our initial thoughts.  Use this form and we'll be in touch. 

The best thing to do is to register and complete our loan application pages.  This gives us the information we need to be able to assess your options properly.

This is what we will want from you

The following list will apply to most situations.  We've shown this here to give you an idea of the kind of things we may need, but please don't treat this as final. 

We will tailor this to suit your circumstances and the needs of your loan application. 

Identification: copy of drivers licence or passport identification.

Income: evidence of income by way of any one of the following;

• a recent payslip (if it shows your annual salary) or your three most recent payslips,
• a letter from your employer that confirms your annual salary and your length of employment with the employer,
• a tax assessment from IRD for the last financial year,
• last 2 years financial accounts prepared by a chartered accountant, if self employed.

Deposit: evidence of your deposit is usually by way of savings account statements, term deposit certificates, and share certificates and needs to cover a six month period. 

Account conduct: evidence of satisfactory account conduct requires three months bank statements from your day to day bank account (where your income is paid to).  These statements can be internet statements but they do need to show the running balance after each transaction.

You can scan and email this information to us, or fax to 0800 802 880. 

See here for our office contact details.

Can we help you to get started?

You can read a little bit more about how we work here.  If you like the way we work, then let's get started.  As the saying goes "there is no time like the present". 

Don't worry about us spamming you, or becoming a nuisance if you make contact with us, - we just don't do that stuff.  If we get even a hint that you'd rather not hear from us, we're gone! 

So why not give us a try? 

• Quick questions here.
• Introduce a scenario to discuss.
• Register and apply for a loan.