To assist with saving for a deposit, check out Explanation of KiwiSaver and Housing New Zealand grants, KiwiSaver HomeStart and Welcome Home Loan.

Although lenders, agents, and mortgage brokers are likely to fill you in on all of your home loan options, it wouldn’t hurt to have a general understanding of some common bank loans.

Getting started – practical steps in buying a home

Now that you have an insight into how the loan-taking process works, you are ready to take the first practical steps in buying a home.

1.  Don’t go through it alone

The home-buying process is not always an easy process to go through; purchasing the right home can take time and can be frustrating. You will also meet lots of different people and have many decisions to make. Most people find it helpful to include a family member or friend to support them through this process.

2.  Establish what you need and what you can afford

Before you start looking for a home you need to know what you are looking for. Sit down and make a list of what you want and need. Include others in helping you make this list. Think about what you can afford, the community you want to live in and the services available in the area.

3.  Get approval

Getting your home loan pre-approved will help you make a realistic estimation on how much you can afford to spend on a house. The lender will quickly go through your financial situation and estimate how much you will be able to borrow. This way you can start looking and narrow your search for homes based on the loan conditional-approval.

4.  Make an offer on a home

This is where a real estate agent enters the picture. He/she will help you in finding a home that fits your requirements and additionally manage the contact with the seller. There are a number of publications that list houses for sale including Trade Me.

It is not uncommon that there are many people interested in buying the same home that is for sale. This often results in an auction. Anybody is then allowed to make offers on the property to the seller. The one who bids the highest normally gets to purchase the house.

Upon purchase your real estate agent will help you with all necessary paper work and arrange with the realtor of the seller. It is then important that you have been unconditionally approved a home loan at this stage.

5.  Property valuations/building inspections

There are two things buyers often do –  get an independent property valuation and a building inspection. An independent property valuation can provide you with a guide on what you might pay for the property based on similar properties in the area. A builder’s report will tell you about the strengths and weaknesses of the home and any potential risks.

There may be some banks that approve your home loan conditionally on obtaining a satisfactory property valuation/building report. Make sure you ask your bank what you need to provide them with before you are able to go unconditional on your home loan.

6.  Closing the deal

The deal is closed when the ownership of the home is transferred from the seller to the buyer. The transfer of the property and funds is handled by solicitors representing the buyer and lender.

7.  Homeowner’s insurance
The lender is going to require house insurance when you purchase a home. This insurance is usually required by the lender to protect their investment, however, acquiring the insurance, the terms of the insurance, reviewing the terms for adequate coverage and paying for the insurance will be your responsibility.

Other housing information

Budgeting Services

There are several non-profit organisations that can help you with budgeting advice. You can contact the Citizens Advice Bureau to find a budgeting service that suits your situation. It also offers a free budget advisory service in some centres. Call 0800 367 222.

You can also find information and advice to help you with budgeting and debt management (including downloadable booklets) on the Sorted website, or contact the New Zealand Federation of Family Budgeting Services which provides a nationwide free service.

Affordable or Shared Equity

There are several Trusts which operate shared equity schemes in New Zealand, however, they typically require at least one member of the household to be in full-time employment. They are worth pursuing if you are in employment but require some financial assistance towards home ownership.

Under the “affordable equity” model a household purchases a share of the home to a level they can afford (subject to certain parameters and conditions). The remainder is owned by the housing provider and both parties would be represented on the property title. The household organises its own mortgage with the advantage (under this arrangement) of having a smaller mortgage than they would ordinarily require to purchase the property.

Read more about different housing programmes at the:

New Zealand Housing Foundation

Dwell Housing Trust

Queenstown Lakes Community Housing Trust

Habitat for Humanity is a global organisation that constructs or repairs homes for families (and some disabled people) all over the world who are in need of financial support. Its rent-then-buy model helps families build a deposit which they can use when seeking independent finance and buy their home from Habitat.

Habitat also has a home repair programme called A Brush With Kindness, which helps low income families back on track with their home maintenance.