If you really want a new home for your family then the you might be surprised to know of this opportunity that allows you to buy a better home than you may have thought possible.
You may have thought that you needed to save more (a bigger deposit) or earn more (a bigger income) to be able to buy that house which your family need.
But maybe you have not been looking at all the options available to you.
There are a few options available for first home buyers.
Have you considered the Government backed shared ownership scheme?
Most first home buyers believe they are limited to a cheaper and smaller home as that is what the bank has said they can afford. The problem is for any first home buyer that has a family a small home may not suit.
Your family needs more space and yet you are told that you cannot afford it, and so the belief is that the only option is to remain renting.
Who Can Crunch The Numbers?
If you approach a bank then they will crunch the numbers using what loan options that bank has, and in most cases that will be pretty limiting.
So a better option is to speak to a mortgage adviser (mortgage broker) that can do the same but with multiple banks and therefore will often be able to find which bank can approve the largest amount for you.
But using the standard bank or even non-bank home loans that still may not be enough for you to buy the house that you need.
This is where the mortgage advisers at Mortgage Managers can help using the Government backed shared ownership scheme. Using shared ownership means that you can buy a brand new home for your family which otherwise might have seemed out of reach.
First Home Partners Shared Ownership Scheme
The First Home Partners is a shared home ownership scheme backed by the Governments Kainga Ora (previously Housing New Zealand) which helps first home buyers into brand new homes.
There is some criteria so this will not suit everyone, but you owe it to yourself and your family to find out if you qualify.
We’ve created a free guide that explains how First Home Partners works, and the simple four step plan to get approved to buy a home.
Essentially the Government is sharing the ownership with you to support more families into better quality and often larger and more suitable family homes.
It’s an opportunity that is working well in this current property market.
A Real Life Example
The best way to show you how First Home Partners can help is with this real life example.
Joseph and Shree (names changed) both work in the health sector and now earn $72,592pa and $80,340pa (combined $152,932) after increases in December when they became better qualified. This is an increase from $54,749pa and $60,340pa (combined $115,089pa) for the last 12-months which is important as the income cap for First Home Partners is a household income of $130,000pa.
They had also been saving, and with KiwiSaver and savings they had about $80,000 for a deposit. They could have applied for the First Home Grant but that would limit the purchase price in Auckland to $875,000 and they could not find a suitable home for their family within that price limitation.
Joseph and Shree felt with the increased income they could now afford the mortgage repayments so tired with their bank to get a mortgage to buy a home, but due to the limited deposit they were told there were not many options and were approved to a maximum of $671,375 which meant with their deposit they could only buy for $750,000
They really wanted to spend an extra $200,000 to buy a home they had seen in New Lynn which is for sale at $950,000
These homes are brand new and Joseph and Shree felt they suited their family well and they knew they could afford the repayments, but their bank said they needed a larger deposit and also with low equity margins and once adding the test rate said they could not afford this new home.
We then looked at the option of First Home Partners:
Traditional Lending
- They would buy for $950,000
- With $80,000 deposit would need to borrow $870,000 (92%)
- They cannot afford $870,000
Lending Scenario (if had been approved)
They would borrow $870,000 which was over 90% and therefore they would have to pay the higher interest rates (with low equity margins) and that could add 1% ($8,700pa / $165 per week) to the repayments, plus they would get no cash-back.
Result
They could not afford to buy a home and therefore would continue to rent. It would likely take another 2-3 years to be able to save the additional deposit required and during that time may miss out on the opportunity to buy in what is currently a buyers market. House prices would be expected to have increased again and so the same house may cost considerably more?
First Home Partners
- They would buy for $950,000
- With $80,000 deposit and $200,000 (21%) from Kainga Ora would need to borrow $670,000 71%
- They can afford $670,000 as noted above
Lending Scenario
They borrow $670,000 which is less than 80% and therefore they get the special deals offered by the lender including lower interest rates and a cash-back.
Result
They were able to buy the home. They aim to pay the mortgage off as fast as possible knowing that they want to buy the share from Kainga Ora (21%) as soon as they can, and therefore have full ownership. As house prices increase it does cost more to buy that share, but they are confident they can progressively buy this, and are happy to have secured their new home at todays prices.
As you can see, Joseph and Shree were able to use the shared home ownership scheme backed by the Governments Kainga Ora (First Home Partners) to buy a better home for their family.
This is one option that we can access, and it can be very good in some situations.
Contact Me Today
My name is Sunil Kumar and I can help you with the First Home Partners and many other options for first home buyers too.
You can contact me here.
