Many Kiwi dream of turning the key and opening the door to their new house for the first time. Daydreaming aside, buying a property and becoming a homeowner is no small feat. We’re bombarded with headlines claiming that the housing market is running away on us, interest rates are higher than ever, and it’s harder to take out a loan. All of this can be a little disheartening if you’re new to the real estate market, but it can make eventually buying a house that much more satisfying.
The good news is, buying a house doesn’t have to be overwhelming. By using tools like Kiwisaver, speaking with a mortgage broker or bank, and managing finances correctly, you can set yourself up with a road map to buying a house. We’ve broken down everything you need to know into a simple step-by-step guide. After reading, you should feel more at home with your house hunt and the buying process.
Terrible pun aside, let’s get started on the guide to buying a house.
Money makes the world go around, and unfortunately, money can be one of the biggest considerations when buying a house. As with any large investment, the first step you should take is to figure out how much money you will need and where there’s potential wriggle room in your budget. It may be worth considering Kiwisaver and other potential financial help early on, especially if you’re buying your first home. Here are other aspects you could consider when managing finances.
Setting realistic goals can be particularly important if you’re on the house hunt for the first time. Affordability is key.
Just like a team of superheroes from a blockbuster movie, teamwork can make the dream work. Buying a house can be complicated, so it may be helpful to assemble a support team that you can trust. Here are some team roles that could be helpful to fill:
A home loan pre-approval is the great enabler! A budget may help you understand your financial lay of the land, but a loan pre-approval can show you exactly how big (or small) an offer you can make based on how much the bank would loan you. Getting a home loan pre-approval can be a lengthy process with a lot of paperwork to sift through. The best place to start may be getting options from your Mortgage Broker or starting a conversation with your bank.
Top tip: It can be handy to arrange your insurance about the same time as getting your loan pre-approval. Talking with an Independent Insurance Adviser can help you consider potential Mortgage Repayment Cover and Home and Contents Insurance.
Now for the exciting part; the house hunt. There are smart ways to go about this so you can potentially filter the best options for your budget. No one wants to be aimlessly driving around suburbs all weekend.
While checking out a house yourself may help you spot any obvious red flags, a property inspection can be the final backstop you need. You should already have a Property Inspector in mind by this point, so now can be the time to let them work their magic. A property inspection is a complete check of a property that may include inspecting its:
Getting a professional to carry out a property inspection can mean that there won’t be any unexpected or unwelcome surprises after you purchase it. While a property inspection can be an up-front cost, it may also prove vital.
The time has finally come to make an offer. Unfortunately, making an offer isn’t as simple as turning up to the property with a wad of cash (we wish). Although the Real Estate Agent for the property should explain the process of putting in an offer, it can be helpful to discuss how to go about it with your lawyer. There are several ways to put in an offer, including:
You’ve had your offer accepted, now it’s time to sort out the settlement for your new property. The settlement period is between your offer being accepted and your takeover date. The vendor and the purchaser agree on the settlement period, and this time can be crucial to ensure the deal and ownership change run smoothly. Your bank, lawyer, and insurer will all be included to ensure nothing is missed. When it comes to your take over date, your lawyer will handle the transfer of money for the property on your behalf. You would have already signed off on all documentation and insured your property before this point. Your lawyer will let you know when to pick up the keys.
Buying a house can feel like a confusing process, especially if you’re buying for the first time. Luckily, there are lots of resources out there to get you started. Doing research can be one of your biggest strengths before taking the plunge. Chubb Life can also help you with your insurance and managing finances when buying a house. Read our buying a house checklist for more advice, or a great place to start is talking with an Independent Insurance Adviser or Independent Financial Adviser - happy hunting.
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