Post COVID-19 things can keep getting easier…
From October last year the Welcome Home Loan became First Home Loan and the KiwiSaver HomeStart Grant became the First Home Grant, the rules got easier. Minimum deposits were halved to 5% and for “second chance” buyers the big thing was that you are no longer asset tested. If you have assets worth more than 20% of the value of the home you wish to buy that is OK, the old cap is gone and you are no longer excluded.
This has a huge impact on second chance buyers. For example, a $500,000 house did need a $50,000 cash deposit, now the same house only needs a $25,000 minimum deposit which is within easy reach for many KiwiSaver Scheme owners. Add to this a grant of up to $5,000 First Home Grant and your deposit becomes very reachable. But as a “second chancer” you can buy the property even if you have assets worth more than the old 20% limit, you can keep your good furniture and car without being excluded from starting again with home ownership.
Now, as NZ works it’s way back from the COVID-19 lock-down, the economic projections are suggesting a fall in house prices for perhaps six months (ASB economist Mike Jones) before a possible strong rebound after this “… low interest rates are expected to have a “cushioning effect” on the market and would be the “starting point of strong excess demand.” While nobody has a perfect crystal ball, the indicators are that now is a good time to be thinking about getting into a home of your own and starting again.
Are you a “second chancer”? A second chancer is defined as “a previous home owner, in a similar financial position to a typical first home buyer.” This often includes people who are divorcees, people recovered from large debts, any people having been caught up in other life situations who are needing to start over.
To find out how these changes (along with today’s low interest rates on offer) will impact you and your ability to own your own home again, contact us now for a free no obligation discussion. Have your questions answered, don’t miss this one!