Well, that was quick! The First Home Partner scheme, which had been operating for just a few short months, has been suspended. It's disappointing, especially given the excitement that surrounded its launch. Many found the application and purchase process to be clunky and not as user-friendly as expected. However, all hope is not lost for those who don't have the 20% deposit saved up...there are alternative options worth looking at.
- Kainga Ora’s First Home Loan: With this option, you can secure a home with a deposit as low as 5%. It's important to note that not all banks offer this, and there are a few hurdles to clear. Kainga Ora requires low deposit insurance (0.5%) and a Registered Valuation needs to be paid for.
- Main Lender Low LVR Lending: To qualify, you need a strong monthly surplus, indicating a strong income. Higher Standard interest rates (vs. bank special rates) are used PLUS a Low Equity Margin, which means a higher interest rate, or a Low Equity Premium, adding an extra sum to the loan, are applied. This is the trade-off for having a lower deposit.
- Family Help: If you have a family member with extra funds, they might be willing to gift or lend you the additional money needed to reach the 20% deposit requirement (without any conditions!). Alternatively, if they don't have cash but have property equity, there could be an option here. This option also requires a strong income to make work.
Each of these options has its unique characteristics and quirks. What works for one person might not work for another, depending on their individual financial situation. The key here is to explore your options and find the one that aligns best with your needs and capabilities.
If you find yourself in the situation of not having a 20% deposit there are pathways to get you into a home. Reach out to explore these options further.