Competing with couples as a single first-home buyer
Ready to buy your first home, all on your own? Firstly, congratulations – if you’ve reached that milestone as a single buyer, it’s a commendable first step.
These days, you’re probably aware that the property market has been more competitive than usual. And as an individual, your journey to homeownership can have its highs and lows. But remember, you’ve worked hard to save a deposit. What you may need now is quality advice and a final push of perseverance.
So, here are some key ways to get yourself ready for the house hunt.
Getting your financial situation in order
First things first, it’s key to stay on top of your finances (including your savings, and credit history). As a single first-home buyer, lenders may need more assurance (than they do from couples) that you can comfortably service your mortgage.
In a way, you’re competing with not just two people, but two incomes. But you still have some key options to help you out:
KiwiSaver First Home Withdrawal – If you’re investing in the scheme, and you meet the qualifying criteria, you may be able to withdraw part of your savings to use towards buying your first home (namely, all funds except for $1,000).
First Home Grant – If you meet certain criteria, you may be eligible for this grant of up to $5,000 for an existing home and up to $10,000 for a new home, or land that you will build a new home on.
First Home Loan – Under specific eligibility and lending criteria, you may be eligible for this option with only a 5 per cent deposit.
KiwiBuild – If you’re looking to buy a new home, KiwiBuild may be able to help.
In addition, it’s a good idea to keep track of your savings, expenses, and debts from the start, and try to boost your credit score as much as possible. Some key ways to do so is by staying on top of your payments or minimising the limit on your credit card.
Casting the net wider
Have your sights fixed on a particular property feature? You might have some locations or homes on your radar that are the ‘dream’ option, but it’s good to be open-minded with possibilities while house hunting.
As a single buyer, it helps to spread out your options so you can allow for more opportunities. Try to note down the difference between your personal ‘must haves’ and ‘nice-to-haves’, and then it can be easier to have more home options work for you.
Get pre-approval
In this hot property market, it can go a long way to be as well-prepared as you can. A good example of this is by getting a loan pre-approval – acknowledgement from the bank that you can borrow an agreed amount, if you meet certain home lending criteria and terms and conditions.
A pre-approval helps since you can know your budget before negotiating with vendors or bidding, and move quickly when it’s your turn to make an offer. As advisers, we’re here to help you understand this in more detail, so reach out if you have any questions.
Out-of-the box options
With a unique situation like yours, might your house hunting strategy be unique too?
These days, more Kiwis are considering some atypical pathways to buying their first home – like with a friend or family member, a group of friends, or someone they can trust.
If you find saving a deposit on your own challenging, you may consider some of these options. Keep in mind that they’re likely to come with financial and legal implications, and there can be risks to be aware of. It’s a good idea to talk to a lawyer, and of course, with us for any mortgage-related questions.
Do you have any questions?
Get in touch anytime – as mortgage advisers, we’re here to help you towards your homeownership goals, no matter if you’re going solo or with a partner.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.