First Home Buyers Tips And Tricks For Negotiating The Path of Affordable Housing Ballots.
If you have decided that you can sacrifice some of the ’10 things on your forever home’ checklist for the opportunity to finally own your own home, then you might have started traversing down the path of ‘Affordable Housing’.
It’s great to see that some of the larger housing developments are now being expected to put aside a percentage of their development for first home buyers so what that potentially means for you is that you get an early opportunity to buy a property that might sell for a different price on the open market.
In my role as the ‘Smarter Mortgage Lady’ I recently helped a client/friend down this track, enabling her to achieve the dream of owning her first home and through this experience, have created a list of helpful tips that can potentially save you a lot of stress. So, here’s the tips from me. Get ready to take notes!
- Have a finance discussion with someone like me: a Registered Financial Adviser specialising in Mortgages – as soon as possible. An RFA is qualified and professionally skilled to ‘run the numbers’ on whether you can get a mortgage, how much it could be and how much deposit you will need. The second aspect to this step is to help you understand your potential costs such as mortgage repayments, legal fees, what the purchase due diligence might cost, builders report and other things you may not have considered.
- Deposit: How much do you have and need? Where is your deposit coming from? Savings? Kiwisaver? Homestart Grant? Parental assistance? Again, working with a professional literally takes all the guess work out of the process.
- Finance Pre Approval: It is important for me to get involved early in your journey as any changes to the information provided to the bank can potentially jeopardise your approval. I can work with your existing bank on your behalf, or the best bank for your situation. You will need to complete and sign an application form and provide supporting documentations to prove your income, deposit and that you are who you say you are (ID and proof of address). At the same time as you are doing this, it is recommended you start the Housing New Zealand Statutory Declaration process as you will likely need some of the same information as you have provided above for Finance Pre-Approval. This can be time consuming, so its good to get onto it ASAP. You will need to get your ID and Proof of Address certified by a Lawyer or JP and you don’t want to turn up to their office on a Friday afternoon trying to enter a ballot for that evening! If you are lucky they will be friendly and accommodating, but be mindful they are doing this as a community service, so be kind and courteous as you potentially won’t be paying for it.
- Ballot application: This is submitted to the developer for the right to enter the ballot to try and buy one of their houses. You are likely going to need some of the information used in the two applications above so keep it all in a safe place.
- Sales and Purchase Agreement: This is quite different to a standard REINZ S&P agreement that people use on a day to day basis and is quite complex. Sit down with a legal representative or someone whose input you trust and go through it page by page, making sure you understand it. This needs to have all the conditions that you require for the bank for the finance approval and needs to have the most suitable timeframe to get all of those conditions completed, such as a Registered Valuation, if your loan is over 80% of the property purchase price, and be sure that you know the timeframe that it takes to withdraw your Kiwisaver, if you are eligible to use it.
- Have all the details handy. This is a biggie. You’re are lucky enough to get your name pulled out the ballot and you had a Pre-Approval for the finance number, however you’re still not on the home straight! Be aware that the lender still has the right to decline or approve the property for that loan based on a number of factors, so you may have to wait for the S&P Agreement to be able to determine this, or if possible have some detailed investigation work done before entering the ballot. Ensuring the property meets your lenders minimum size and property style guidelines is critical to getting past this stage.
As you can see, it’s pretty detailed, but that’s how I can help. If you’re hungry to become the owner of your own home, then contact me. I can help you traverse the affordable housing path, add some value to your purchase and I won’t charge you a thing. Why wouldn’t you?
I love getting people into their owns homes so if you’re ready to get into your first home, let’s talk. e: rachael@ilg.co.nz
