Buying first home/ young home buyers/ people under 25

So as title states,

wanting to discuss property. More along the lines of first time buyers and at a young age.

This forum seems to be regularly visited by mature people so maybe i will get some decent feedback on the topic.

In this economy, it seems basically impossible unless you have wealthy parents to back you or your making 200k plus a year. 400k house will require a 80k deposit. How are you suppose to save 80k and if you manage to, you will be hard pressed to find a decent house for 400k. They seem to be more along the lines of 650+ for a 3 bedroom. Well in east Auckland anyways.

Maybe i'm looking at it the wrong way..

Has anyone on this forum recently purchased their first home?

If so,

How old are you?

Did your age affect anything at all while trying to obtain your loan

Which bank did you go through?

Roughly what sort of income are you on?

Cheers guys

I think I was fairly lucky on the house that me and my fiancee now share, good timing meant the housing prices in CHCH weren't completely crazy.

At the time I had 20% deposit myself. The house was very solid but very original, which turned off many buyers I'd say, 60's combination of wallpaper, carpet and paint is not very pretty anymore. I purchased at 26.

Now we've completely renovated and we plan on paying off the mortgage before moving on.

Being in Auckland it must be tough, if you could consider buying elsewhere in the country and make a shift you might find it easier to fit your budget.

Auckland houses are high but i reckon they will still go up a bit more then drop slightly.

There are ways around the 20% rule. Some banks are lending 10% to first home buyers and if they dont then you can go to non bank lenders like resimac. they do charge more interest though.

I would advise you to sit down with a mortgage broker to find out if you are in a position to get a pre approval at 10%, thats if you have that. I can give you some details if you cant find one. Sometimes you can even get 95% depending on if you have a high income

Whats the reason for buying? do you have a family you need to home or are you single? do you just want to not get left behind?

I think the easiest way to get in the market is to buy an investment property first. You will not get left behind, gives you freedom to move around renting as you wish. you will need to top up the mortgage but you get some tax back at the end of the year so its not that bad.

You could wait to see what the government will bring out but by that time prices may have gone up more.. and if they make it easier then there is more competition which will push up prices

Good Luck!

only thing I can add is that if you are buying it with another person MAKE SURE that the 2 off you are 100% committed to each other, I brought a house with my ex wife 10 years later we divorced what a crap of a time, had to sell house to pay her out, ( family trust brought it so I now rent the same house).

Mind you we paid $80k for the house, house was then destroyed in a house fire , new house that replaced it has a GV of $500K so sorta had a win ?

Cheers everyone for the replies, they were very helpful. Yeah i definitely will be staying Auckland due to family and my new job. My new income is basically the only reason i might have a chance to purchase a house. I have a wife and newborn and in all honesty we are comfortable renting. Currently in an apartment and been here for just over a year. We were thinking about moving out of the apartment and into a 3 bedroom house just so it's easier with baby and for a bit more space. The reason i want to purchase is because i would rather pay off my own mortgage than the landlords. My wife is currently not working due to baby only being 6 weeks but she will go back to work probably after 3 months. I want to try get a loan approved based on just my income so that when she goes back to work, it will make life easier. Less than 500k for a house in ponsonby.. haha dreaming mate. Last week a very old wooden 3 bedroom house around the corner from my parents place in botany auctioned for $837k, the reserve was $650k that's just insane. sales like that make it seem impossible atm.

Recently bought my first place

Settled in Tauranga - good value for money and prices are (touch wood) still climbing, got a near new house for just over 400. Could have built for a wee bit more but this place ticked every box I had

Didn't have a hope of saving deposit in the near term, bought because I got offered a slightly left field offer to go halves in a purchase with my best mate. I'm kind of my own landlord - I own half the property but pay 90% of the rent, once our respective equity equals each other we make a call for me to buy him out or sell the property and split any gains. Lawyer and real estate agents all reckon they're seeing it more often.

As has been mentioned it does no harm to get everything laid out clearly - in my case it's a very cast iron contract - but it's a great feeling to see that mortgage slowly but surely start dropping down. Has meant no toys for me for a while which is a bit of a downer - but it makes a great change from that nagging semi guilt feeling you get spending a few grand on a car and going "hrmm this is like half a house deposit"... Now I just go hrmmm this would pay for that spa pool... haha

P.S Can I have whatever income you're on? Haha

Wow, houses out of Auckland are much more affordable. Tauranga is a beautiful place and wouldn't mind living there but moving out of Auckland just isn't an option. I'm currently on between $70-90k a year which isn't much but i guess it's not too bad considering i'm 22. Hoping that will be enough to secure a loan otherwise will have to wait till my wife goes back to work. Not being able to buy any toys will definitely be a downer for me as well but hey, short term loss for long term gain right? lol

 whatshouldiget? said:

Wow, houses out of Auckland are much more affordable. Tauranga is a beautiful place and wouldn't mind living there but moving out of Auckland just isn't an option. I'm currently on between $70-90k a year which isn't much but i guess it's not too bad considering i'm 22. Hoping that will be enough to secure a loan otherwise will have to wait till my wife goes back to work. Not being able to buy any toys will definitely be a downer for me as well but hey, short term loss for long term gain right? lol

what do you do for a job out of curiosity ?

Management position in sales. Get a decent base plus commission. Been working full time since 17 and this is the best job so far.

On my income alone i've had pre approval for 190k at 10% deposit because of my age and income. That'll get me a rental in student city, where i can nearly gaurentee tennants, and have a few long term lined up. Will be a couple of years off as i just bought a new toy hahaha but my wages will only trend upwards from where i am currently being a registered sparky, all the old boys are retiring and bugger all young guys taking it up. We'll be getting close to plumbers wages soon!! Lol

 Johnnynz said:

I have almost pulled the trigger a few times now, I no longer fit young home buyer I guess at 27.

However my sister and her partner purchased there house at 19 and 20 respectively, crazy stuff but they got a good opportunity on a well priced house in a regional town. Because they had been saving for a couple of years (Again crazy I know) they went to a mortgage broker and got an exceptional fixed rate for a Minimal cost through ASB with a 20%ish deposit.

The biggest thing I took from there whole experience is how much money they saved using a Mortgage broker and how many doors it opened. Eventhough they had all there ducks in a row banks wouldn't have a bar of them until the broker got involved.

They saved money going through a mortgage broker? Really??!! From my understanding, If you go through a mortgage broker it's a lot more expensive due to broker fees and also in the end when you do get approved the interest rate is through the roof. I suppose I should go see one and see where i stand. Can any recommend a decent one that does not charge an arm and a leg?

They saved money going through a mortgage broker? Really??!! From my understanding, If you go through a mortgage broker it's a lot more expensive due to broker fees and also in the end when you do get approved the interest rate is through the roof. I suppose I should go see one and see where i stand. Can any recommend a decent one that does not charge an arm and a leg?

Kiwi Foz i assume your talking about property investment as opposed to buying your first house. That is another option I should consider.

 whatshouldiget? said:

They saved money going through a mortgage broker? Really??!! From my understanding, If you go through a mortgage broker it's a lot more expensive due to broker fees and also in the end when you do get approved the interest rate is through the roof. I suppose I should go see one and see where i stand. Can any recommend a decent one that does not charge an arm and a leg?

Kiwi Foz i assume your talking about property investment as opposed to buying your first house. That is another option I should consider.

No they get their commission from the bank. you dont pay them directly. I found that they get you better rates. Try Kris Pederson Mortgages, hes in New Market

I'd suggest waiting to see what extras come out of the election to help buy your first home as it looks like that's one area that's going to get a lot of attention in the next few weeks.

We tried through a broker and she was hopeless. Wouldn't shop around and would only use one particular lender who wouldn't lend on a townhouse. So we went direct to the banks.

The worst part of the whole process was going to open homes every weekend for months. That drove me bonkers.

Also kiwisaver saved my ass for getting my half of the deposit together but it can't be used for the initial deposit to the agent. It only gets processed on settlement day so we had to negotiate a lower initial deposit but that wasn't a big deal for them.

37 and 30

bought 2 years ago.

used a broker - Brent Lattimore at Focus Financial

saved like mother ****ers for deposit.

did plenty of reno work including the garden we now have 25% equity in our house

value has further increased . We are 45k over the rv.

Best advise - worst house best street you can afford. Buy a reno job, by that I mean where you do superficial work like paint and trim.

If you reno a kitchen, make sure it has good bones/cabinets. You could get away by only doing the doors and or countertop.

Get a good advisor, property is an investment. Are you based in Christchurch?

Decided to rent for another year or so. Just sat down with the MRS and worked out a spending/saving plan. Going to try live on a budget. I'm bad with saving. Generally just buy what ever when ever i want lol. I'm Based in Auckland. More specifically, East Auckland. The market has sky rocketed in East Auckland. The apartment i'm renting atm was considered to be expensive last year. Just had a look on trademe and everything else has caught up. Ideally i would like to purchase around my area as it's a nice place to live but it's honestly ridiculous atm. Old 3 bedroom houses are being auctioned and going for the 800k mark.

 Johnnynz said:

As STI4sale said no charge. Well I cant speak for all but I know I'm pretty sure it cost them nothing... Maybe a small fee less than $100 to show they werent wasting anyones time.

The biggest hurdle they faced was there age, being both extremely young they were getting doors slammed in there faces left and right despite having a solid plan and deposit. The broker was amazing, the interest rate she got them was lower than the advertised rate for that bank in the end.

How long ago did your sister and her partner purchase?

I went through mike pero brokers just before the chch quakes - were actively looking at the time, turned out to be for the best we didn't buy (since the houses we looked at all are since levelled)

But they were no fee, I'm guessing they get a kickback from the bank when the loan is drawn down. Have had friends in the same boat as above, getting lower than advertised rates just cause the broker dude knew about ways to get them.

Also worth looking into a bit is if there are any concessions available through your company (I'm guessing you're in some form of corporate entity?) - just ask the question around the place. Between the pair of us we got a couple grand in initial fees knocked off and half a % off the rates. Sounds like f-all but it adds up in a hurry and they aren't normally advertised by either party very well (also got me half price on my life insurance)

For that first home save, save, save and lower your expectations.

Far too many first time buyers expect that first home to be a dress circle address.