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Transcript

Breaking the 20% Deposit Myth · That Home Loan Hub

• 0:10
  Speaker 1: Kia ora, and welcome to another episode of that Home Loan Hub.
• 0:13
  Speaker 1: I'm Zibunisa Alimova, mortgage advisor, mom of four and someone who's walked the home ownership journey with hundreds of Kiwis, just like you.
• 0:22
  Speaker 1: Today I want to bust a myth that holds so many people back I need 20% deposit to buy a home, not true?
• 0:31
  Speaker 1: Let's talk about low deposit home loans, what your real options are are and how to make them work for you.
• 0:37
  Speaker 1: What is a low deposit loan?
• 0:40
  Speaker 1: A low deposit loan means you're buying a home with less than 20% deposit.
• 0:45
  Speaker 1: Traditionally, banks wanted buyers to have 20% saved.
• 0:49
  Speaker 1: That's $120,000 for a $600,000 home, which can feel impossible for many first-home buyers.
• 0:56
  Speaker 1: But in New Zealand there are actually pathways to buy with as little as 5% to 10% deposit.
• 1:04
  Speaker 1: Let me break it down to you how Kayanga Ora's first home loan scheme.
• 1:10
  Speaker 1: If you've never heard of it, tune in closely.
• 1:12
  Speaker 1: Kayanga Ora offers something called a first home loan, where pre-approved lenders allow you to buy with just 5% deposit.
• 1:21
  Speaker 1: The catch there are income caps and sometimes property value caps, and you must meet certain eligibility criteria.
• 1:29
  Speaker 1: So, as of now, your household income must be under $150,000 combined, or $90,000 for an individual.
• 1:38
  Speaker 1: You must live in a home, so no rentals and you can't already own a property If you qualify.
• 1:45
  Speaker 1: This is a fantastic starting point and I help clients access this all the time.
• 1:51
  Speaker 1: Banks that loan with less than 20% deposit.
• 1:54
  Speaker 1: Now, many major banks will still consider applications with 10% deposit, but there are a few things to know.
• 2:00
  Speaker 1: You will likely need to pay lender mortgage insurance, so low equity premium Interest rates might be slightly higher.
• 2:08
  Speaker 1: The banks will look harder at your income, debts and spending habits so it's doable, but you'll need a clean.
• 2:15
  Speaker 1: Harder at your income, debts and spending habits so it's doable, but you'll need a clean, strong application.
• 2:21
  Speaker 1: This is where having a mortgage advisor really helps, and there is one, currently a major bank that offers a loan with as little as 5% deposit.
• 2:28
  Speaker 1: Now, non-bank and second-tier lenders If you don't qualify through Kyanga, aura or the bank says no, there is still hope.
• 2:34
  Speaker 1: Non-bank lenders, also known as second-tier lenders, are more flexible on things like credit history, income type and deposit size.
• 2:44
  Speaker 1: Yes, interest rates can be higher, but often this is a short-term strategy to get you into the market.
• 2:50
  Speaker 1: You can refinance later, once you've built some equity.
• 2:53
  Speaker 1: And what's the catch?
• 2:55
  Speaker 1: You'd say.
• 2:55
  Speaker 1: So let's be honest Buying with a low deposit has some risks Higher repayments due to a bigger mortgage, less buffer if the market dips and you have to sell Extra fees or premiums or margins.
• 3:07
  Speaker 1: But the upside you get into the market sooner you stop paying rent and you start building wealth through home ownership.
• 3:16
  Speaker 1: The key is being financially prepared and having a clear plan.
• 3:20
  Speaker 1: I've got a case study for you here.
• 3:22
  Speaker 1: Let's have a look at a client's story from 8% deposit to a first home.
• 3:27
  Speaker 1: I had a single mom come to me with an 8% deposit.
• 3:30
  Speaker 1: The banks went interested.
• 3:32
  Speaker 1: She had a good job but didn't like her short work history.
• 3:35
  Speaker 1: We worked with a non-bank lender, tidied up her budget and within three months she was holding the keys to her own home in Levin.
• 3:43
  Speaker 1: Six months later we managed to refinance her with a mainstream bank at a better rate.
• 3:48
  Speaker 1: And that's the kind of journey a low deposit can start if you know your options.
• 3:55
  Speaker 1: So I've got some tips for you as well today.
• 3:56
  Speaker 1: Tips for making it work.
• 3:57
  Speaker 1: Start budgeting early.
• 3:59
  Speaker 1: Banks love to see consistent saving.
• 4:02
  Speaker 1: Clean up your credit.
• 4:03
  Speaker 1: Even small defaults can affect approvals.
• 4:06
  Speaker 1: Talk to an advisor early, even if you think you're not ready especially if you think you're not ready.
• 4:11
  Speaker 1: And then consider location flexibly.
• 4:14
  Speaker 1: Look beyond your dream suburb to get started, because remember, your first home is not your forever home.
• 4:19
  Speaker 1: And my final thoughts for you today don't let the 20% deposit myth hold you back.
• 4:25
  Speaker 1: Yes, it's ideal, but it's not the only way.
• 4:28
  Speaker 1: With good advice, realistic planning and the right lender, you can buy with less, and I'd love to help you figure out what's possible for your situation.
• 4:37
  Speaker 1: That's all for today on that Home Loan Hub.
• 4:40
  Speaker 1: If you found this episode helpful, share it with a friend, leave a review or reach out for a chat.
• 4:44
  Speaker 1: I'm always here to support your home ownership journey.
• 4:47
  Speaker 1: Until next time, stay hopeful, stay prepared and don't stop dreaming.