Guide On How To Buy A House
We know how lengthy the process of buying a home can be. We’ll take you through the steps to buy a home in New Zealand, so you have everything you need to know in one place.
Step one – General research
Start by researching the area and types of property you’re interested to buy in. Take note of the average house prices, number of listings and how long the properties stay on the market.
Make sure you also check out the education facilities and local amenities and cafes to get a feel for the community.
It’s also crucial to stay up to date with the latest developments in the area, finding news and insights around the property market.
The more informed your decision the better.
Step two – Finances
The initial research you do will provide a good idea of houses prices in the area. It’s important at this stage to understand your price range by getting your finances in order to determine the deposit you require.
You will need to budget to work out how much you need to save towards your deposit, and confirm these figured with a potential mortgage provider before going any further.
Step three - Understanding the home buying journey
Before you start house hunting, you’ll need to have professionals on hand to ensure that a home is the right choice for you. This includes a lawyer, an insurer and a bank or mortgage broker. You may also need a building inspector.
It pays for first home buyers to be well versed in the support on offer from the government to get them on the property ladder. From withdrawing a sum from KiwiSaver to put towards your deposit, to first home loans created to reduce the required deposit from 20% to sometimes as low as 5%, depending on the provider.
Step four – Home loan pre-approval
You may need to get a mortgage directly from a bank or non-bank lender.
This covers how much you can borrow for a home loan. It remains conditional until a registered valuation of the property and signed sale and purchase agreement is provided.
The lender will look at your income, expenses, debt and deposit to make this decision.
It’s best to shop around and negotiate to get the best rate. It’s a good idea to enlist the help of a mortgage broker to get the most value. They can negotiate on your behalf and help put a loan application together
The amount you can borrow depends on what you can afford to repay on your current income and how much you can lend against the value of the property.
Types of mortgages include different interest rates, fees and degrees of flexibility. These affect how much the loan costs and when it will be paid off.
Table loan is the most common type of home loan which can have a fixed or floating interest rate. There is also the option of a revolving credit loan, off set loan and reducing loan.
It’s important to have steps in place to manage a mortgage, as well as knowing about refinancing a mortgage when you replace your mortgage with another.
Step five - Finding a property
You need to know about the methods of sale – auction, tender, deadline sale etc – types of ownership and how to identify potential risks.
It’s important to keep an eye out for any structural issues, flooring, plumbing, paint and roof problems.
You need a LIM report, builders report, property inspections and the record of title. To help spot any potential hazards and issues.
Don’t be afraid to ask as many questions as you like.
Step six - Making an offer
Understand how the process works, including if another buyer puts in an offer and it becomes a multi-offer. It’s handy to ask your lawyer for a title search and confirm finances with the bank or lender.
Conditional offers means that the offer is dependent on a number of criteria being met. If a conditional offer is accepted, all the conditions have to be met by the given due date. When this happens, the offer becomes unconditional.
Unconditional offers mean you agree to the terms set out in the contract. This occurs if you’re buying a property at auction, through private negotiations or tender.
Step seven - Settling and moving in
Four to six weeks after your offer is accepted, you will undertake a pre-settlement inspection.
On settlement day both parties lawyers will exchange the remaining money, transfer documents and the keys to the property.
Congratulations, if you follow these steps you’re now a home-owner.