At Stephanie Murray Mortgages (SMM) we are all about finding solutions for property ownership for as many clients as we can. It’s all about looking and thinking “outside of the square” – and by overcoming problems in this way, we can help those that never thought it was quite possible to get on the property ladder...
There is nothing quite like a home that you can call your own, your part of our uncertain world and the security that owning your property can give a stable future for you and your family.
With interest rates being at a record low, it is an excellent opportunity to get on the property market. It also means your weekly outgoings are going towards something that will benefit YOUR future, rather than your landlords. However, if you are a landlord, this is a chance to increase your property portfolio, too.
Below, the SMM team have highlighted some of the ways in which you can get on the property ladder that you may not have considered yet…
1. Parental Guarantees
Parental Guarantees involves funding the shortfall of your 20% deposit from the equity in your parents’ home. This means that you borrow the purchase price of the house minus what you may have by way of deposit, and the remainder of the equity comes from your parent’s property.
Each case is unique in using Parental Guarantees, but this is something that the SMM Mortgages Advisors can guide you through.
2. Take Advantage of a KiwiSaver HomeStart Grant
We are always surprised by just how many customers do not realise they are eligible for a KiwiSaver HomeStart Grant. The grant allows new home buyers to get up to $20k towards a new home. There are conditions to the scheme; the property must be intended to be lived in, it has to be your first home, and you have to have paid into your KiwiSaver for up to 3 years. Income caps apply and purchase price maximums that vary region by region. Have a browse at this link. We also suggest it is a good idea to get this pre-approved well in advance.
3. Second Chance KiwiSaver Withdrawal
Yes, this does exist! If you have owned a home before, did not withdraw from your Kiwisaver previously and are deemed to be in the same financial position as a first home buyer you may be able to withdraw your Kiwisaver. For more information, follow the link here.
4. Bank of Mum & Dad
If you are fortunate enough to be able to have a gift from parents or family – this is still an option for your deposit to go towards an owner-occupied or rental investment. You do not necessarily have to have saved any of the deposit. Each case is a little different.
5. Purchase with a Family Member or Friends
This option is becoming more and more popular as house prices have risen. It may mean that you live in the property together, or it may mean that you purchase the property as a long term rental investment. You may still be able to withdraw your Kiwisaver and receive a HomeStart Grant. The most significant advantage is that the banks will look at your “combined” deposit and income, which can make things a lot more within reach for new home buyers.
6. Move to A New Side Of Town
We all know that there are certain areas in New Zealand that you can purchase your first home for a lot less. Many more first home buyers are choosing to buy their first property in locations outside of where they grew-up or work with the view to renting the property out. The banks do require more deposit for these instances; however, the purchase prices are generally lower. It is a great way to get on to the property ladder and to gain some additional income if you rent.
7. Using a “Non-Bank” Lender
At SMM we work with many “outside of bank” providers and over the years have built up excellent relationships with non-bank lenders which can suit clients for a range of reasons. Of course, the interest rates that are applied are higher than central banks but, with interest rates being historically low overall, you would be surprised at the rates we can achieve.
An example of this might be someone who has an unstable credit history or low credit score. This is the sort of client that SMM might fund through a non-bank provider for the first year. Once all repayments and obligations have been met in that time, we can generally refinance the client to a bank and therefore lower rates. By going down this route, it means we can help clients get in their own property sooner.
8. We Can Look At The Bigger Picture
You would be amazed at how many times we have new clients come to us that have been declined finance with a lender and the team at SMM find a solution. All banks and lenders have different credit criteria, and this changes frequently. It is our role as Mortgage Advisors to be on top of all of the policies and changes to make sure we get an “approved” for you … just because one bank says no it doesn’t mean they all will!