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Changes for First Time Home Buyers.  

Your family could hold the key to your home

Most lenders are now offering an easier way for first-time home buyers to get on the property ladder. You can leverage off your family members’ home equity to get to the required 20% deposit.

For some time now that banks have required a 20% deposits from first-time buyers, however the deposit doesn’t have to be completely savings based, which is usually a struggle for many young people with rising house prices.

Deposit funds can come from:

·         Savings

·         Gift

·         KiwiSaver

·         First home buyers’ subsidy

·         Equity from a family members’ home.


When looking at loan applications banks will also consider the following:

·         Loan affordability

·         Level of existing consumer debt

·         Credit history

·         Age of parents or family member

·         Whether the property used is an owner occupied property or rental

·         Location of the property


The beauty of this initiative is that your family does not have to give ‘cash’ up front, they simply use the equity they have in their home to help you get a foot in the door. They are also not required to make a mortgage repayments, that’s up to the First Home Buyer.

So how does it work?

If you want to buy a house that is on the market for $400,000, but you only have $20,000 saved, this house is currently out of reach for you.

However, if your family can help the mortgage can be structured in such a way that you have two separate loans. Your standard home loan and then another loan that is shared with your family, using their equity. See picture below:


In the example above I have shown a way of paying the equity part of the loan off at an accelerated rate, in this case over 10 years. If you find that this is too expensive then the repayments can be reduced by paying the equity part over 30 years.

To find out more about how this could help you secure your first home, call us today 0508 466 356.

If you have any friends or family that may be interested in finding out more please either forward them this email or refer them to us and we’ll do the rest.


For more detailed information please click here to go through to the Advanced Mortgage Solution Website.


If you want to talk to us about how we can help first time home buyers, give us a call on 0508 466 356.

Contact us to get free personal mortgage and home loan advice

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