In addition to the great news regarding the relaxing of the deposit restrictions recently (check out Adam's blog on this), we have some more good news - If you thought there was no movement on the 20% deposit requirement which some lenders require, think again!
Enter Welcome Home Loan - which has been helping out plenty of our clients who have a small deposit and meet certain criteria buy their first home.
Essentially the way it works is that the Housing New Zealand agree to guarantee the loan, and they approve it as well as the bank who provides it.
How is it different to a normal Home Loan?
The Welcome Home Loan works really well for those who have a smaller deposit, mostly if they have been gifted the full deposit by a relative or other party, or have some Kiwisaver and Home Start Grant to contribute.
A number of lenders offer this product as part of their lending, and we work with you and them to make sure it's the best fit for you. We have also been successful recently with obtaining special interest rates for those who are receiving the Welcome Home Loan - which makes a massive difference to what you pay week to week.
So what do I need to get a Welcome Home Loan?
- Be a first home buyer and live in the new home you buy
- Be a NZ Citizen or Permanent Resident with no travel conditions
- Have been in your current job (or in the same industry) for at least a year
- Have low current debt
- A 10% deposit (you can use gifted funds or your Kiwisaver and the Home Start Grant to get up to this level – see our blog where we explain these in more detail)
- Earn less than $80K for an individual, or $130K for a couple
- To wish to buy under the house price cap for your city or region
- Meet the normal lending criteria with respect to being able to afford repayments and meeting all other financial commitments
- Have a good credit record
The next step if you meet all these criteria is to come and see us.. as there are varying factors involved with borrowing 90% of a property's value, and we can make sure you're not paying too much on your home loan and will be able to put the right structure in place for you.
If this sounds like it would fit well with you, contact us today for a chat about what we can do to make it happen!
- Adam Thompson, Claire Martin & the My Mortgage Team