Boost for home buyers, says adviser
The 5% home loan deposit scheme has returned, which is a win for mortgage advisers and first home buyers, says an Auckland broker.
Money Empire financial adviser Lisa Barton (pictured) said this was a good opportunity for Kiwis as it opened another sector of the property buyer market.
“This is a great incentive for those wanting to buy a home and take the plunge into property ownership,” Barton said. “Especially with the banks taking a step back with CCCFA restrictions, this is another alternative for people who aren’t quite there yet with their complete home deposit.”
Seven lenders in total are offering the scheme to eligible first home buyers, said Barton.
“So far Westpac, Co-Operative Bank, SBS, Unity, Kiwibank, NBS and NZHL are taking part,” she said. “It is quite a variety of lenders each with their own level of lending criteria that clients need to meet.”
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Barton said for first home buyers to be eligible, they must live in the property they are purchasing, have never owned a home before, be a New Zealand resident and have a minimum 5% deposit of the total property price which could include funds from their Kiwisaver, a grant, genuine savings or a monetary gift from family member.
“The scheme is also available to second-chance buyers who have owned property before but might have separated from their partner and come out with minimal funds and can buy another house,” she said. “However, income caps come into play under the scheme to be eligible. A single person must earn less than $95,000 per year and a couples combined income must be less than $150,000 per year.”
Barton said property price caps (which were introduced on previous home buyer schemes) were removed this time.
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“In Auckland, the price cap used to be $625,000 for an existing dwelling and $650,000 for a new dwelling, however that has now been removed which creates more opportunities for people to buy their first home,” she said. “However, if you are eligible for the first home grant of up to $5,000 for an existing dwelling or $10,000 for a new dwelling and you want to buy your first home under the first home loan scheme and get the grant, you can only purchase up to a certain price. For example in Auckland the cap is now $875,000 for a new or existing dwelling.”
Barton said mortgage advisers could help their eligible first home clients navigate the emotional rollercoaster of buying a property.
“By having someone with experience and knowledge in your corner who has worked with first home buyers help guide you through the process is invaluable,” she said. “We can save you both time and money. We can also help buyers connect with a lawyer, a builder, a valuer, etc. We are here to help from start to finish.”
