With LVRs (loan-to-value ratios) tightening along with high property prices, homeownership – once considered a right in New Zealand – may now seem as likely as finding the Yellow Brick Road. But while the LVR rules and property prices can make it tougher, the good news is that you do have options that can help you achieve homeownership.
Here are a few scenarios and options to consider:
You have the affordability, but not the deposit. So, you’ve pulled together all your sources of deposit, but you still don’t quite reach the 20 per cent deposit requested by the bank?
Consider your non-bank lending options. Some non-bank lenders can lend you more than 80 per cent of the required amount to buy your house, like RESIMAC Direct. Keeping in mind, of course, that you’ll still need to prove that you can afford the repayments.
You have the deposit, but can’t find anything in your price range? You might like to consider buying a house somewhere else and renting it out. While, in an ideal world, we would all be able to buy our first house to live in, for some of us, buying a house in the same area we need to live and work in is just not financially possible.
By buying a house in a different area, you can get the benefits of homeownership, potentially without the huge mortgage that comes with property prices in major cities. However, you won’t be able to use your KiwiSaver for your deposit (this can only be used for first-home purchases if you will be living in the property), and you also need to consider whether you can ‘top up’ your mortgage payments, as well as continue to pay your rent.
Your lender will go through these calculations with you, to make sure you have affordability for homeownership and renting, before approving your loan.
Can your family provide assistance? Many parents now are looking for ways to assist their children into first homes. Parents can use the equity in their house, to provide a helping hand for their children – either through guarantees, topping up their existing lending, or gifting funds to their children. Talk to RESIMAC Direct about whether family help to get you into your first home is a possibility for you.
Tidy up your spending. We’ve all heard the stories about how hard it is to get a mortgage now, even if you have the deposit. When there are restrictions on lending, lenders can be, or tend to be, a bit more choosy on who they lend their money to.
Make sure your application is one that shows you are serious about homeownership and making your mortgage repayments. Try to cut back on your discretionary spending to show that you’re committed to putting your money into saving – and then repaying your mortgage.
Homeownership is considered to be so difficult at the moment, that many people are giving up on their dream and living a lifestyle instead. However, homeownership is still a possibility for many potential borrowers – it just means looking at your options differently. Talk to RESIMAC Direct today, and ask us how we could help you get on to the property ladder.
See if you qualify. To get a more accurate idea of how much you can borrow with RESIMAC Direct, click here