Buying your first home is exciting, but also daunting. It’s one of the biggest investments of your life and just getting to the point when you can take that vital first step on the housing ladder can sometimes feel out of reach.
Even now as house prices begin to ease, with interest rates rising, the benefits of a lower deposit and smaller mortgage can be outweighed by higher mortgage payments, leaving prospective first home buyers in a bind.
That’s why the Government has come up with ‘First Home Partner’, a shared ownership scheme, administered by Kāinga Ora – Homes and Communities, designed to help first home buyers overcome the deposit barrier.
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So how does it work? If your deposit and home loan aren’t quite enough, Kāinga Ora can contribute up to $200,000 or 25% of the price of the property (whichever is lower and criteria dependant). This means that you will still be the majority homeowner and occupier, but Kāinga Ora will own a share in the home that you will pay back over time.
To be eligible the prospective buyer needs to be looking to purchase a new-build or an off-the-plan property, and have a maximum household income of $130,000, be older than 18, a NZ citizen or have a right to residency, and the buyer must commit to living in the property for at least three years from the settlement date. They are required to try and repay the Kāinga Ora share within the first 15 years of ownership.
The good news is that throughout the period of shared ownership, Kāinga Ora will meet at least annually with the household to support them to achieve their goal of buying out the share owned by Kāinga Ora and becoming a full homeowner.
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So if you are a potential homebuyer who didn’t know about First Home Partner or simply want to find out more about how it works, Colliers is hosting informative seminars in Auckland – for more information, visit the event website here.
Colliers are offering first home buyers a range of choices amongst residential products that qualify for the First Home Partner scheme facilitating an easier pathway to home ownership.
Jeff Davidson, director of residential projects at Colliers New Zealand Limited, will be speaking along with Colliers Residential Projects sales manager, Juliet Lichtenstein, and a representative from Kāinga Ora – Homes and Communities and mortgage experts from BNZ and Westpac.
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Jeff Davidson says he’s really keen for people to take advantage of the First Home Partner scheme – especially because it offers possibilities that first home buyers may not have fully considered.
He says, “It’s a bit of an unknown gem and has all the advantages of a shared ownership model with either friends or family, but without the emotion.”
“This scheme is targeted at first home buyers who are having trouble overcoming the deposit barrier. So, for example, if a developer is prepared to accept a minimum 5% deposit and the bank requires 20%, First Home Partner can provide assistance in the form of an equity contribution with no direct costs to bridge the gap.”
So, what are you waiting for?
