Your first home buying questions answered

From finding just the right place to understanding how a mortgage works, there’s a lot to learn when you’re looking to buy your first home. To help you out, we’ve got the answers to some of the most common questions asked by first home buyers.

Do I need a home loan pre-approval before I start looking for my first home?

A pre-approval is how much money a bank or lender has agreed that you can borrow to purchase a home. Getting a pre-approval before you start looking isn’t necessary, but it is a good idea because it gives you a price range to work within when looking for your first home. Most pre-approvals are valid for 60-90 days.

How can KiwiSaver help me buy my first home?

After you’ve been a KiwiSaver member for three years, you may be able to withdraw funds from your KiwiSaver to help you purchase your first home. You may also be eligible for other KiwiSaver initiatives such as the HomeStart grant which gives you up to $10,000 towards buying your first home if you’re eligible.

Can I get a home loan if I have other loans?

If you have a car loan or credit card debt, this can significantly reduce the amount you are able to borrow for your first home. It is still possible to get a home loan, but it’s a good idea to minimise this debt as much as possible before applying.

Do I need to have savings?

It’s a good idea to have some money set aside in a savings account to demonstrate to the bank or lender that you can save and manage your money. When they see that you have discipline around money, they’ll likely be more comfortable providing you with a home loan. If you’ve been steadily saving for a deposit, this will make a big difference.

I have a student loan - will this affect how much I can borrow?

This really depends on your situation. Student loans in New Zealand are often considered ‘good debt’ because if you stay in the country, they don’t accrue any interest. If you have saved up a deposit and you’ve got enough income to pay off your student loan and your future mortgage repayments, then it likely won’t be an issue at all. To make sure you get it right, it’s best to talk to a mortgage adviser.

Who can I go to for help with a home loan?

If you’re not sure where to start to get your first home sorted, Union Plus can help. Just click the button below and we’ll be in touch to have a free, no-obligation chat about how you can make your first home a reality.