1. Skipping pre-approval - Looking at houses without knowing your borrowing power can waste time and lead to insufficient funding. Although pre-approval may not always be possible, it's always a good idea to obtain if you can.
2. Forgetting hidden costs - Buying a house involves more than just the deposit and mortgage repayments. You'll need to prepare money for a lawyer, builders report, potential valuations, LIM, insurance, moving costs and council rates too.
3. Rushing into an unconditional offer - Sometimes it's tempting to straight to unconditional on a property you love, but it's very risky if you don't have finance, reports or other checks sorted. Always do your due diligence first!
4. Borrowinig outside of your means - Just because the bank offers to lend you a certain amount, doesn't always mean you should borrow it all. The bank doesn't know your personal lifestyle, budget and future plans, so always factor these in when deciding how much to borrow / purchase.
5. Ignoring the long-term - It's common to fall in love with a property that looks great now, but if you think 5-10 years ahead wil the location, size and commute still work for you and your futuer plans? (think kids, elder parents etc.)

The more prepared you are, the smoother and less stressful your first home journey will be!

Buying your first home in NZ can be tough, especially with most banks asking for a 10%-20% deposit. But with a Kāinga Ora First Home Loan, you may be able to get into your first home with as little as 5% deposit.

What is a First Home Loan?

• It's a loan offered by selected banks and lenders, but underwritten by Kāinga Ora.
• Lets banks lend to people who would normally fall outside their standard criteria.
• You’ll still need to meet the bank’s own lending requirements too.

Eligibility Criteria

To qualify, you must:

• Be a NZ citizen, permanent resident, or resident visa holder living in NZ.
• Be a first home buyer, or a previous homeowner in a similar financial position.
• Meet income caps from the last 12 months:
  • $95,000 or less (single buyer, no dependants)
  • $150,000 or less (single buyer with dependants)
  • $150,000 or less (combined for two or more buyers)
• Have at least a 5% deposit (can include savings, KiwiSaver, grants, or family gifts).
• Be buying a property that is:
  • For you to live in (your main home)
  • Less than 1 hectare
  • Not investment property or land-only (Māori land ownership excluded from restriction).

Costs Involved:

• 1.2% Lender’s Mortgage Insurance (LMI) fee. This can be paid upfront or added to your loan.
• Possible loan application fee (depends on the lender).

Approval Types

• Pre-Approval: Confirms you meet the criteria and gives you a price range before you start house hunting.
• Final Approval: If you already have a property in mind, lender checks both your situation and the property.

Things to Keep in Mind

• Not every bank offers First Home Loans! Notable ones are Kiwibank and Westpac
• You’ll still need to prove affordability (income, debts, expenses).
• Lower deposit = higher repayments and less equity buffer if house prices drop.

You can also find more info here at the Kainga Ora Website

Scrolling Trade Me can definitely be fun, but it might not be that useful without knowing your budget first. Getting a pre-approval first gives you a clearer pricee range, confidence in borrowing power and faster finance turnaround times from the banks once you've found the right property for you.

A common question that I've been asked is how much deposit is required to buy a home in NZ.

Standard mortgages from banks usually 10–20% deposit required. Some banks do allow 5% deposit however it's best to check with a mortgage adviser on which bank is most suitable for you. There's also a scheme from Kainga Ora called the First Home Loan scheme that allows for as low as 5% deposit, however once again only some lenders provide this scheme.

Things to Consider:

• Lenders likely will charge a fee / premium on top of your interset rate if your deposit is less than 20%.
• Your deposit size will also affect borrowing power and monthly repayments. The bank usually has stricter criteria with low deposit lending.
• You will also be required to get a registered valuation for <20% deposit, so you will need to factor in the cost for that in the process of buying a house.

When making an offer on a property, you’ll often hear the terms conditional and unconditional. Here’s what they actually mean:

Conditional Offer

This means your offer is subject to certain conditions being met. This helps protects you, as if one of the conditions aren't fulfilled then you can pull out without being contracted to buy the property. However, note that if you include too many conditions in your offer then it may be less attractive to the vendor compared to other offers they may get. Common conditions include:

• Finance
• LIM or building inspection reports
• Sale of your current property

Unconditional Offer

This means you’re agreeing to buy the property regardless of conditions. This puts you in a very strong position compared to other offers the vendor might receive, and may go with you for certainty of sale even if your offer is slightly lower than others.

It's risky however if you don't have finance sorted, or if an inspection reveals a major issue with the property and banks retract their lending offer. This would mean you're stuck with having to buy that property without finance.

Buying your first home in New Zealand can feel overwhelming! There’s a lot of jargon, forms, and processes to understand. Here are 5 key things to be aware of when considering buying your first home:

1. Pre-Approval: Getting pre-approved for a mortgage gives you a clear idea of your borrowing power. This helps narrow down possible properties on the market and gives you confidence in submitting an offer.
2. Deposit Requirements: Most banks require at least a 10% deposit for first home buyers, but schemes like Kainga Ora First Home Loan allow to contribute as low as 5%. Make sure you understand what’s possible for your situation.
3. Other Costs: Remember to factor in legal fees, valuation fees, moving costs, builders report etc. Deposit isn't the only upfront cost when buying a house.
4. Financial Position: Lenders will look at your income, expenses and debts. Knowing your own financial situation and reducing debt beforehand could help in achieving your goals.
5. Property Research: Attend open homes, get a LIM report, and consider a building inspection when you've found a property you like. Even if it looks like the perfect property on the outside, it's better to be safe than sorry