Buying a home, and getting a home loan, is a serious and important event in your life. You are gaining security in living arrangements for you and your family but are also undertaking a lengthy financial commitment. Being ready to get into the property market is important. So, how do you know you are ready?
Sufficient Deposit: Having saved enough for a deposit is crucial. Typically, this is around 20% of the home's value, but under certain conditions, it could be as low as 5%.
Sources of your deposit could include cash savings, funds from your KiwiSaver, selling assets, or even a family gift or loan. Some individuals may qualify for a First Home Grant from the Government- sweet free cash!
Income Stability: You should have the financial capability to repay the loan. This involves having a stable and substantial income.
Your income can be derived from employment, where you receive a consistent salary or wages, or from self-employed business income. Having a steady and reliable income source is crucial for managing mortgage repayments.
Double Income?: Having multiple sources of income within your household can enhance your financial position. Dual incomes can provide more stability and increase your borrowing capacity.
Understanding Financial Commitment: Recognise the magnitude of the financial commitment involved in homeownership. Consider future financial goals, such as education, travel, or other investments, and ensure that your budget accommodates these goals as well as future loan repayments.
Creditworthiness: Ensure that your credit history is in good standing. A positive credit history is vital for securing a favourable mortgage rate.
By evaluating these financial aspects, you can make an informed decision about whether you are prepared to embark on the journey of homeownership. Getting the right people on board at the start is important, including a mortgage adviser. Give us a shout here or contact us below if you think you are ready to jump into home ownership.