But most importantly there are excellent options available to get in to a home
There was an interesting article posted on Stuff.co.nz this week. Although it was quite short and focused only on Auckland, the point it was making is quite valid.Home ownership rates are dropping, a lower percentage of people own their own homes than in the past, and that concerns us. The recent Reserve Bank changes to increase the required deposit for most borrowers to 20% is only going to further reduce the opportunities for people to get in to their first home... but all is not lost.
The good news...
There are still plenty of viable options for people to get in to their first home and that's where I can help.
All banks are still lending over 80% (albeit less than a year ago) and the Welcome Home Loan is a great option and there is no limit on how much lending can be written under this product providing people have 10% deposit.
Then there is the availability of Kiwisaver to be used as deposit. Most people are starting to amass a reasonable amount in their Kiwisaver fund by their mid 20's which can often get them close to 10% deposit. Add in the First Home Buyers Grant from Housing NZ which can be up to another $5K and things look even better. If you consider these two options across two people in a relationship then 20% may even be achievable.
Can your parents help? There are many ways to do this, whether it is gifting money, lending money or even becoming part owners in the property. These are generally better options with less risk than the traditional guarantee even though this is still available.
The key message here is for people to consider all of their options and build a plan. That's where we come in. We are happy to discuss the situation of any potential home owners to set a plan and guide them through possible options. Ultimately we can arrange the best home loan for them from a range of lenders and help them achieve their goal of home ownership.
So if you or someone you know would like to discuss options simply drop us an email and we'll go from there.Adam and the My Mortgage team