The rules regarding deposit and lending requirements are still not clear for many people.
One of the questions we get most from buyers is, how much deposit do I need?
The answer is as follows:
Home buyers can borrow 90% on a new property and up to 80% on an existing property.
In addition, qualifying home buyers may obtain a Home Start Grant of up to $5,000 on existing and $10,000 on new homes and couples can obtain up to $10,000 on existing and $20,000 on new homes.
Furthermore, it may be possible to withdraw your Kiwisaver funds to put towards the purchase of an owner-occupied home.
Investors can borrow up to 80% on property that is under construction, or property that has been completed within the last 6 months and is being sold by the builder or developer who constructed the property.
If investors buy existing property, older than 6 months, they can lend up to 60%.
In some cases, investors can borrow up to 90% through a combination of bank and non-bank lending.
The LVR restrictions apply to the mainstream banks only e.g. ANZ, ASB, BNZ etc. They do not apply to non-bank lenders. The non-bank lenders often charge higher rates of interest but are useful to ‘top-up’ what the bank will lend. Once you have purchased you may be able to refinance later and take your lending back to a major bank.
We can refer you to some excellent mortgage brokers to assist you with lending. It often comes down to the right brokers speaking to the right lenders about your personal situation.
I hope this helps clarify the issue.
John Kenel, Assured