It may be “the word on the street that you can purchase your first home with 10% deposit“, but what is really required? If you can walk into a property with 20% deposit, a whole new world opens up for us. There are better rates available, the banks treat you like a human and the process is just generally a lot smoother.
But what if I don’t have 20% I hear you say? Well, there are a few ways we can get up to the 20% mark.
Firstly is it possible to purchase a cheaper property? I know, I know, you need 4 bedrooms with 3 bathrooms a pool and a sunroom, but is that all more important than getting into your home? What if you could get something cheaper, add some value and then work your way up the ladder? It’s not common that your first home will be your dream home.
Do you have friends or family that would want to get involved? There are products in the markets now for parents to help their children into their first homes. Perhaps with some gifting? Maybe you have working children that may wish to be involved? Gifting is a great way for the family to help out. There is however a catch, you still must have saved 5% of the deposit yourself. This is mandatory and if you want to learn more about savings and how to maximise KiwiSaver, read our article.
Equity share projects. I have seen and heard about equity share projects that are coming into the market, however, you again may know someone that has equity in their home and could be interested in investing with you in your home, for an equity share. Of course, legal advice should always be sought when looking at doing anything. like this.
And if none of this is possible, we are back to the 10% deposit which of course can be done. the criterion is a lot tighter and there is less funding available for these purchases.