1. Starting out
Plan your long-term goals and begin thinking of ways you can start budgeting and saving.
In this step, we’ll go through things to think about when setting your goals, some of the home ownership costs you’ll want to consider, how to build a support team and places to go for help with making a budget or to start saving for your deposit.
By the time you’ve finished this step, you’ll know exactly what you need in a home – and how to turn those needs into a plan to own one.
Owning a home means something different to all of us, so when we set our sights on buying one, it makes sense that you might be at a different stage of your life to someone else with the same goal.
Everyone’s journey will look a little different, but some of the key benefits of home ownership remain the same for all of us.
- You have a place that you can truly make your own – you can furnish, decorate or renovate as you see fit.
- Fixed mortgage rates can make it easier to manage bills and plan ahead.
- Paying off your mortgage can build equity.
- You have long-term stability in one location.
- You are able to put down roots and become part of a community.
Setting some long-term goals can help you make a plan for buying the right home for you. Working through a few key questions can help you get started.
- Where do you see yourself in 5 or 10 years?
- Are you looking for a first home or your forever home?
- Where do you want to be living – close to the city or in a specific suburb?
- Where will you be working – do you want to live nearby?
- How much of your income will you be able to put towards regular mortgage repayments?
- Who will be paying the mortgage with you?
- Do you have any big expenses coming up that you need to budget for?
- Are you buying for yourself, or looking at buying with family?
- Will other family members be living with you? What are their needs?
Once you’ve answered these questions, it won’t take long before the first picture of your ideal home will start to take shape. From here you can start to draw up your budget and set a timeline.
It’s easy to see how important it is to have a solid budget and a clear savings goal when we think about what it means to buy a home – for most of us, it’s the single biggest purchase we’ll make in our lives.
Sorted.org.nz(external link) is a great place to start for free budgeting advice, calculators and resources. You’ll also find tools to help you manage debt and map out your money goals – from short-term to lifelong.
With the Sorted mortgage calculator(external link), you can also get a sense of what your home loan repayments could be, the amount of interest you’ll pay or even how extra payments could pay off your mortgage sooner.
Here are some resources from Sorted that may help you in this stage of your journey:
While you’re saving for your deposit, it also pays to budget for a few other one-off costs that come with buying a home.
We’ll go through these in more detail throughout this guide, so for now it’s just worth knowing your plan will need to budget for costs like:
- solicitor’s or conveyancer’s fees
- building inspections and reports
- LIM reports and council and property files
- moving costs
- savings for any extra costs that may pop up.
When all of that is taken care of and you’re living in your new home, you’ll also have ongoing costs to think about. These can include:
- home loan repayments
- insurance – for your home and contents
- rates – fees for the services your council provides
- utilities – water, power, internet and others
- maintenance and renovations
- body corporate fees (if your home has shared space with other owners, like an apartment or townhouse).
A good team can build confidence in your decision-making, simplify some of the more technical steps of buying property and will guide and support you along your path to home ownership. Your team will grow as you work through this guide, but here’s what you may want to consider to start off.
Banks and lenders – Your bank can take you through different options for savings accounts or give you advice on things you can do now to grow your chances of getting a loan later on. Even if you still think home ownership may be a while away, you might also find it helpful to speak with other lenders about the different ways they can support you.
Mortgage broker – Whether you hire a mortgage broker is completely up to you. Mortgage brokers can make the financial side of home buying easier with help finding the best banks and lenders for your situation. They will work with you to get a complete picture of your financial position and negotiate the terms and conditions of a home loan with banks and lenders on your behalf. You can read more advice on mortgage brokers, how they work and what to expect on the Financial Markets Authority(external link) website.
Insurer or insurance broker – It’s likely home insurance will be a condition of your home loan, so it's a good idea to think about insurance options early in the home buying journey. You can find useful information about home insurance at sorted.org.nz(external link).
Family and friends – Family and friends can help you throughout your home buying journey through financial support, giving their feedback on potential homes, supporting you at an auction or during the purchase process and celebrating with you once you’ve bought your new home.
Here are some useful website links to assist you with the “Starting out” step.
- Sorted.org.nz(external link)
- Budgeting tool(external link)
- Goal planner(external link)
- How to save your money(external link)
- Mortgage calculator(external link)
- Savings calculator(external link)
Page updated: 12 February 2024