1. Map out a budget
It might seem like quite a challenge to create a budget for something so big, but you need to get an idea of what you’re currently working with to figure out how much you can afford. Track your weekly, fortnightly and monthly expenses and see how they compare to your current income. Take a look at anything you could pare back or cut costs on, and that will give you an idea of how much you have to put towards a deposit.
2. Calculate how much you’ll need
For most homes you’ll be looking to purchase, you’ll need a deposit that’s 20% of the value of the home. This means that for a home worth $500,000, you will likely need a deposit of $100,000. It seems like a lot, but once you know what kind of figure you’re looking at, you can make a plan to save – even if it takes a few years, your hard work and discipline will pay off!
Hint: If you want to know what the mortgage payments will be on your dream first home, check out our handy mortgage calculator to give you an idea.
3. Figure out what you’re eligible for
There are a few initiatives in place in New Zealand for people looking to buy their first home. These have some great benefits and can really help you when you’re getting your deposit together. With a Welcome Home Loan you only need a 10% (soon to be 5%) deposit , which might seem a lot more achievable. If you’re currently in KiwiSaver, you might be eligible to withdraw some of your savings to put towards your first home. KiwiSaver members may also be eligible for a HomeStart Grant of between $5,000 and $20,000 depending on your circumstances.
4. Visualise your goals
Now that you know roughly how much you’ll need to save, write it down. Keep track of your progress regularly – even if it’s just your written goal popped up on the fridge. It’s easy to forget what you’re aiming for, especially if it’s going to take a little while to reach, so keeping it somewhere visible will remind you. Labelling your savings account with a name like ‘My First Home’ will also help you to focus on your goal and keep working towards it.
5. Start saving now
Not only will you end up accumulating more for your deposit the sooner you start saving, you’ll also be able to show the bank that you’re disciplined and have created good saving habits. Demonstrating that you’ve got a respectable amount saved up and have been working on it for a while will set you apart when it comes to being approved for finance – it proves to the bank that if you are approved for a mortgage, you’ll be able to maintain it.
If you want to get into your first home but aren’t sure where to start, get in touch with one of our friendly and knowledgeable mortgage advisers today – it’s a free service and we’ll take you through the home-buying process step-by-step so that you can reach your goals and set yourself up for a brighter future!
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