Author Katrina Shanks, CEO Financial Advice NZ Article originally published in Stuff.co.nz.
No one can dispute the security of owning your own house. It gives you control of knowing someone can’t give you notice to move out or not renew your rent.
It means you have the freedom to do all the little things that can help make a house your home, such as painting a room your favourite colour, or transforming a garden, or hanging pictures on the walls, or upgrading the bathroom vanity. And that’s before thinking about the likely capital gain in the future on your asset.
The ability of many people to buy their first home is getting harder almost by the day as the lack of housing stock creates huge demand and pushes up prices.
Despite that, there are many ways you can buy your first home, some are obvious and some are more creative.
The most common method now is saving hard through your KiwiSaver and using that as part of your deposit. As a first home buyer you can withdraw all the KiwiSaver contributions made by you as well as by your employer to use as a deposit, provided you meet these conditions:
– You have been a KiwiSaver scheme member for at least three years
– You will be living in the house for at least six months
– It’s your first home
Of course, the key to this is your level of contributions.
Ensure you are saving the most money you possibly can. Don’t focus too much on the fees and returns of your KiwiSaver funds if that is paralysing your decision to put away more.
Just remember, the more you put away, the better off you’ll be when it comes to that deposit.
The minimum contribution to KiwiSaver is three per cent of your employee earnings, but you can make it up to ten per cent if you wish, and because it’s taken away before you see it, it’s almost painless.