HOME BUYERS GUIDE
What are the steps to buying a home? Here, we give a rundown of the key steps in the Creating Wealth Home Buyers Guide we’ve pulled together.
1. Sort your deposit
First Home Buyers
If you’re buying a home for the first time, there are a few ways you can make up your deposit. Some lenders require 10% while others require a 20% deposit (depending on the LVR restrictions / levels and when you’re applying).
If you’re unable to save the full amount required through savings alone, you could consider asking the help of family offering a gift or a loan or guarantee, withdrawing from your KiwiSaver and/or accessing The Home Start Grant.
Buying another property
If you already own a property and are looking to buy another investment property, you can use equity in your existing home to purchase another. We’ll help you to work out how much you’ll be able to borrow, and you may need to organise a property valuation on your existing property to get this process started.
- Be realistic with your budget so you’ll stick to it
- Put aside an emergency fund to cover unexpected expenses once you purchase your home
- Look into your KiwiSaver and see if you’re eligible to make a withdrawal
2. Contact Creating Wealth for Pre-Approved Finance
Now that you’ve saved your deposit, it’s time to talk to Creating Wealth about your options for buying a home.
You’ll benefit from our knowledge and experience in personal lending, with access to our extensive network of lenders so you’ll get the best advice and best deal. Apply online or send us an email to get the ball rolling.
3. Start your House Hunt
Start searching for your ideal home, making the most of online sites like realestate.co.nz and trademeproperty to see listings before going to open homes.
HOUSE HUNTING TIPS
- Write a list of your must-have’s vs your nice-to-have’s
- Consider getting a real estate agent as a buyer who will act for you during your search and help you with negotiation when you’re ready to put in an offer
- Do your research and take your time at the open homes to look through the home properly including opening cupboards, windows etc and checking water pressure etc
- Ask lots of questions about the home including its history, other property prices in the area, how long it has been listed for, incomplete maintenance etc
- Stick within your budget range so you’re realistic and understand what you can get for your money
4. Make an Offer
Once you’ve found a home you like and that you can afford, you can make an offer. Depending on the listing, this may be by tender, negotiation (where you make an offer), private sale or auction. Make sure you understand your obligations under each scenario for buying a home.
For example before you bid at an auction all terms and conditions for the bank must be met, and your offer must be unconditional including having the lawyer confirm the property and LIM prior to auction day.
MAKING AN OFFER TIPS
- Talk to the listing agent to get as much information as possible on the vendor expectations and comparable sales in the area
- Do your research including checking the QV and homes.co.nz websites, looking up other sales in the area, and driving around the neighbourhood during day and night to check out other properties that have sold and the general area
- Consider getting a registered valuation done on the property if you can afford one (normally approx. $500-$1000)
- Factor in any outstanding maintenance or maintenance to be completed into your offer and ensure you explain any deductions to the listing agent
- Ensure you ask for 12-15 clear working days to organise going unconditional if you are using Kiwi Saver and/or the home start grant.
5. Offer Accepted – Get Your Finance in Order before going unconditional
Once your offer is accepted, by default you have 10 days (or a different time period if agreed at negotiation) to get your finance in order before you're officially buying a home.
- Get a signed copy of the sale and purchase agreement sent direct to your lawyer and Creating Wealth.
- Contact your lawyer to get a LIM report on the property and check the sale and purchase agreement. They’ll also start preparing the MoT (Memorandum of Transfer) to transfer the land title to your name.
- At this stage, all bank pre-approval conditions must be meet, including getting the property signed off as acceptable to the bank. You may also have to provide a registered valuers report and/or builders report, so it’s best to get these booked in right away. Once the bank is satisfied, we’ll forward their email to your lawyer to confirm finance.
- Kiwi Saver withdrawals and First Home Grants both have separate paperwork that can take up to 10 working days to confirm. You’ll need to complete and submit it ASAP to meet deadline.
- Next you’ll need to arrange your deposit to be paid to the lawyers trust account, either by internet banking or by visiting a branch. If an overdraft is being used to cover this until settlement date, there will be monthly interest costs you will need to cover. Do not pay the deposit until you have met all the conditions.
- Once all conditions are met and the deposit is paid, your property purchase becomes unconditional. Congratulations!
6. After you’ve gone unconditional
Structure your lending
Once you’re unconditional, it’s time to work with Creating Wealth to structure your lending. This includes fixed rates, which can be confirmed and signed off up to 30 days before settlement. We’ll also discuss your first payment date and frequency. You’ll need to sign forms to lock in any fixed rates – until they’re signed and submitted, all rates are subject to change.
You’ll need to set up your house insurance and organise a direct debit for this to come out of a nominated account.
A bill is automatically mailed from the council every 3 months, so there will be a pro-rata amount to pay depending on when your settlement date falls. Make sure you set up a direct debit or AP with the council to make this seamless.
The bank will be in touch at some point to discuss opening new or sorting existing accounts in order to ensure they match your new requirements and setting up account mandates. If it is more convenient pop into your local branch and arrange an appointment to go through requirements, if you are new to this bank you will need to bring in two forms of I.D and confirmation of address.
Make an appointment with your lawyer before your settlement date and let us know when this is. We’ll ensure you have structured your lending and given time for the bank to process everything, so that your loan agreements can be sent to your lawyer before your appointment. Remember to organise a will while you’re there. We can recommend a lawyer if you need one.
7. Settlement Day
Wahoo, settlement day where you take over ownership of your new home. Your lawyer will be working with the bank involved to have the mortgage put in place and final payment will be made to purchase the property. It can often be after lunchtime before you receive a key to move in.
- Cash Back: If there’s a cash back it’ll be paid to the nominated account after settlement
- Deposit: If you paid a deposit via a temporary overdraft, this limit will drop off today. Note the facility’s interest won’t be charged until the 1st of the next month.
8. What Next?
Congratulations on your new home - you did it! Here are some things to be aware of:
- Your mortgage repayments will automatically be deducted from your account
- If you haven’t set up a rates direct debit, contact council or wait for your first bill to arrive
- Creating Wealth will touch base with you in another year, either when your fixed rate is going to expire or just to check-in. We’ll keep in contact with you annually to ensure your mortgage is fit-for-purpose and that you’re achieving your property and investment goals as quickly as possible