Deposit requirements vary between lenders and are based on criteria that can change over time. 20% deposit of the purchase price will be acceptable by most lenders. There are lenders that lend with deposits as low as 10%
Lenders will often require that the deposit can be demonstrated with a minimum of 3-months savings history in either a bank account or investment including Kiwisaver.
First home buyers with KiwiSaver for at least 3 years may be eligible to withdraw from their KiwiSaver account and may also be eligible to have government subsidy from Housing New Zealand. Previous home buyers may also be eligible to withdraw from their KiwiSaver and a deposit subsidy but must first apply for approval.
A guarantor can offer security for the portion over 80% of the purchase price. Guarantors should be close family and be in a strong financial position. They would need to seek independent legal advice before agreeing to act as a guarantor.
Family Equity Assistance
The purchaser borrows 80% of the purchase price in their name, and the remaining 20% is borrowed as a joint equity loan with a surety – usually their parents. The purchaser must be able to repay the total loan as a whole. The 20% joint equity loan is secured against both the purchased property and the surety’s property. The liability of the family is limited to the amount of the equity loan.
A large proportion of wealth for NZ households is in the form of housing. Property investment is one of the main ways to increase your family wealth. It can also be an excellent superannuation scheme in the right circumstances. A property investment loan can be approved just on the equity amount of your property, even if there is no any deposit.
An Investment Property Loan is a loan provided for the purchase of, and / or secured by, residential investment property. Residential investment property is property that is not owner-occupied, or for the owners’ exclusive use (such as a holiday house).
A loan used for construction of a residential house on vacant land or to make structural renovations to an existing property. It is normally on a cost to complete, progress payment drawdown basis.
A Valuer’s Completion Certificate confirming the property is complete and the value of the property will be required prior to final draw down. Code of Compliance will become a Condition after Advance, to be received within 60 days of final drawdown.
A loan is used for other purposes other than home loans.
A loan can be used to buy a new car, to go on holidays, and to set up a small business. The application process is the same as for most other loans. Certain requirements are to be met e.g. security on what you have or what you are buying, and you’re servicing ability.