by Emma Raho
How to Adult. Home Sweet Home.
Whether you’re wanting to shift out of your parents place into your first flat or are looking to move on from renting and jump on the property ladder getting yourself a home can be pretty daunting. It requires three things I loathe - doing maths, being stressed out and getting organised. However, as annoying as these two necessary evils are the pay off will be your new pad.
Renting.
First up, you’re going to need to crack out your calculator and grab a pen and paper. You’ll need up to 4 weeks rent up front that your landlord will lodge with Tenancy Services as a security bond. After that, you will need to factor in the cost of moving your stuff in and anything you might need to buy for the property. You don’t need to panic too much over this, if you have access to a van and a couple of strong mates it’s far cheaper to buy a tank of gas and a few boxes of beers than hiring a professional moving company. This said, professionals are just that. They know what they’re doing and are pretty fast and efficient, especially if you already have a house load of stuff to move.
After you’ve factored in these basic costs it’s time to hunt for a property. In my experience most property managers put their listings on Trade Me so it’s well worth creating an account if you don’t already have one. It’s also worth jumping onto individual real estate agencies websites to have a look at their lettings list.
Viewings are usually held at set times to ring ahead to find out where and when.
Some things to keep in mind
- A lot of landlords are funny about pets, especially dogs. You may have heard of ‘pet bonds’ as a way of getting around this but these types of arrangements are not legally recognised. It’s better to find a rental that either allows pets or is at least open to negotiation.
- Don’t get into bidding wars, you’ll end up paying way over market value. There will be other properties.
- If you’re moving into a shared house try and meet the other flatties before you sign up for the room to check out if you’ll be a good fit.
- Read as much as you can on the Tenancy Services website. As a renter it’s really bloody essential to know your rights and what you and your landlord may and may not do.
Buying
Oh dear God. Even the thought of this brings me out in a prickly sweat. Unless you’re digging silver spoons out of your throat, buying your first house is going to be one of the biggest deals of your life and sadly for us impatient folk, it’s not going to happen over night.
First of all you’re going to need to work out what you need to save up for your deposit. According to Sorted.org “Most lenders will require a minimum deposit for a home loan of at least 20% of the amount we are borrowing. So if buying a house worth $600,000 [you’ll] need to save a deposit of at least $120,000. There may be some exceptions, however, such as through the Welcome Home Loan Scheme for first home buyers, which would require a deposit of 10%.” The TL;DR version of that is that you’re going to have to spend a couple of years eating porridge and cutting your own hair to save up a deposit. Unless you’ve got a handy family trust or a winning lottery ticket you’re gonna be in for the long haul. Buying a house requires more stages than you’ll believe is possible. From real estate agency fees to legal representation, and unfortunately this will all take a chunk of your precious hard saved cash. Don’t despair though, expert help is on hand to help you through and stop you falling into unnecessary pitfalls.
Firstly I’d recommend have a read through the sorted.org website to give you a clear to follow idea of what to expect. Then, make an appointment with a mortgage advisor like Angela Wallbank. Experts like this can cut down your stress levels and end up saving you a fortune by helping you find the best resources to get your foot inside the gate.
We had a quick chat with Angela to get a quick n dirty idea of how mortgages actually work
Sans Pareil - Angela, can you explain what a mortgage actually is?
Angela Wallbank - It’s the money you borrow from the bank to buy property. First home, next home, investment etc. And for that, the bank will charge you interest on the money you have borrowed. The bank will lend you money against the property, this is called security.
SP - Ok, So how would I go about getting one?
AW - There are two main things you need to consider. Deposit and affordability. The deposit is how much you have to put towards the purchase of the home. For a first home buyer, this is generally around 10% however 20% deposit is recommended. Your deposit can be made up of savings, a gift from parents, KiwiSaver, Home-Start grant (from the government) you'll need to make sure you are eligible for some of those. Affordability basically means: do you have enough money left from your income after your living expenses and other expenses to pay back a mortgage?
The best way to find out where you currently stand is to seek advice from a mortgage expert. You can also go to your bank directly.
SP - So what’s the difference between a mortgage advisor and the bank?
AW - A mortgage adviser generally has access to main banks and other lenders. Every bank is different as is every individual's situation so having that wider view with an adviser can be beneficial to you. It is not one size fits all. If you go directly to your bank they only advise you about the products and services they supply. They might be able to give you a mortgage but how will you know it is the best option?
An adviser can make a judgement about which bank to send you to based on the information you supply. There is no cost to you and ultimately saves you time as the adviser collects all the required documents and works with the bank on your behalf.
You may be a little wary about using a mortgage adviser and know that you can trust your bank. A mortgage adviser works on behalf of clients with banks so the banks have checked us out, we hold registrations with them otherwise we would not be able to process any applications with them.
