A Step-by-Step Guide to Buying Your First Home in New Zealand
Buying your first home is an incredibly exciting milestone, but it can also feel overwhelming. From the initial spark of interest to the day you receive the keys, there are many moving parts. At LifeDirect Mortgages, we understand that this is a once-in-a-decade event for many, and we’re committed to guiding you through every step of the process. Our independent advisers work with all banks and lending institutions, ensuring you get advice and loan options tailored to your unique situation.
1. Initial Contact: Let’s Get Started
Your journey begins when you contact LifeDirect Mortgages. During this initial conversation, we ask you some basic details—your location, income bracket, and deposit level—so we can start to understand your circumstances and discuss the potential for a home loan. Whether you’re curious about borrowing power or ready to begin the application process, our friendly team is here to help.
2. Discovering Your Options with Our Online Tools
To give you an accurate idea of what you can afford, we direct you to some of our favourite online tools:
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Mortgage Payment Calculator: Get a feel for the monthly payments you might be looking at.
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How Much Can I Borrow Tool: Compare borrowing capabilities across multiple lenders.
These tools help frame your financial picture early on, making your subsequent discussions with us as streamlined as possible.
3. The Online Application: Your First Formal Step
After our initial chat, we invite you to complete an online application. This is the first phase in building your loan case, and it covers basic information that will be refined as we move forward. Once you’ve submitted your application, we schedule an online meeting to walk through your details together and identify any missing information. Our goal is to ensure your application reflects your full financial strength.
4. Tailoring Your Loan: Choosing the Right Product
Not all home loans are created equal, especially for first-home buyers. Based on your deposit level and financial profile, we help determine the best product for you:
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First Home Loan (Kainga Ora Product): Ideal if you have a deposit between 5% and 20%.
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Regular Home Loan with Over 80% Loan-to-Value Ratio: A suitable option if you can provide a larger deposit.
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New Build Loan: Perfect for those buying directly from a developer, often with more flexible criteria if you have a smaller deposit.
At this stage, we work closely with you to establish a clear budget, considering both the purchase price of the property and the likely loan repayments.
5. Understanding the Process and Your Role
One of the most important parts of our service is ensuring you understand every aspect of the process. We set aside ample time to go over:
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The Home Buying Process: From application to settlement, we explain each step in plain language.
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Documentation Requirements: What financial statements, tax returns, and additional records you need to provide.
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Expert Referrals: When questions arise beyond our expertise (in areas like accounting, legal, or building inspections), we seamlessly connect you with trusted professionals.
We pride ourselves on being your advocate, ensuring you’re informed and confident as you make decisions.
6. Securing Pre-Approval or Setting a Maximum Budget
Our next goal is to get you a pre-approval from one or more lenders. Pre-approvals help define exactly where you stand in a competitive market. However, if banks are unable to issue a pre-approval—especially for those with less than a 20% deposit—we still work hard to provide you with a maximum borrowing budget. With a clear figure on hand, we can then secure a commitment from the bank within a designated period (typically 10 working days) to help you be ready to bid at an auction or negotiate confidently in a competitive sale.
7. From Contract to Confirmed Finance: Overcoming the Hurdles
Once you’ve found your home and the vendor has agreed to sell, our work intensifies to ensure your finances go from conditional to unconditional:
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Reviewing Conditions: We work through the finance conditions in your contract and ensure that any building or insurance conditions are clearly explained and addressed.
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Pre-Settlement Work: Our advisers collaborate with your lawyer to get finance confirmed as soon as possible.
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Navigating the Deposit:
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Understanding Deposits: Remember, the deposit required at this stage is not the same as the bank’s deposit requirement. It’s paid into the real estate trust account to secure the agreement.
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Timing: Deposits are typically due within three working days, although variations can occur. If you’re using KiwiSaver funds, additional processes (usually 5-7 working days) are involved to release and certify the funds.
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Our role here is to streamline communication between you, the bank, and your lawyer, ensuring every detail is taken care of.
8. Loan Structuring and Finalizing Your Offer
After your purchase is confirmed, we come together to compare the offers from various banks and discuss the ideal structure for your loan:
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Loan Options: Fixed-rate, floating-rate, revolving credit facilities, and offset loans.
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Loan Terms: Setting a term up to a maximum of 30 years, selecting your payment frequency (weekly, fortnightly, or monthly).
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Additional Protections: We guide you through considering life insurance, income protection cover, and even reviewing your KiwiSaver arrangement with our provider Koura.
Once you agree on the structure, we send you a detailed confirmation. With your approval, this information is forwarded to the bank to prepare the final loan and mortgage documentation, which you will sign through your lawyer.
9. Settlement and Beyond: Staying Connected Throughout
Settlement marks the exciting moment when your loan is finalised and the property becomes yours. However, our support doesn’t end there:
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Settlement Coordination: We ensure that the bank and your lawyer complete the final steps, intervening only if issues arise (which is rare).
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Post-Settlement Follow-Up: Within two weeks of settlement, we reach out to confirm everything is in order and to answer any residual questions.
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Ongoing Advice: As your interest rate nears its review date—typically 60 days out, with a final check just two weeks before rollover—we contact you to discuss re-negotiation options. We believe that locking in a rate too early can leave money on the table, so we help you time your decisions for maximum benefit.
Final Thoughts: LifeDirect Mortgages Is With You Every Step
Purchasing your first home is a life-changing event, and at LifeDirect Mortgages, we’re dedicated to making it as stress-free as possible. From that initial phone call to the day you finally step into your new property, our goal is to keep you informed, supported, and confident. We don’t just connect you with a bank—we guide you through every stage of the process, ensuring you’re never left wondering what happens next.
If you’re ready to take the next step in your home buying journey, contact LifeDirect Mortgages. Let us help you navigate the maze of paperwork, negotiations, and financial decisions, so you can focus on what really matters: making your dream home a reality.
More Insights to Consider:
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Keeping your financial records up to date makes a huge difference in how quickly you can secure a pre-approval.
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Work closely with your accountant and lawyer early on to iron out any potential issues.
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Stay proactive—regular communication with your mortgage adviser ensures that if market conditions change, your financing strategy can adapt accordingly.
Your dream home is closer than you think—with LifeDirect Mortgages, you’re never alone on this journey. Let us hold your hand through every twist and turn until you’re celebrating a successful settlement.
