There have been lots of comments about the lack of low deposit home loans on the online forums like on the Facebook group Kiwi First Home Buyers and others.
Why? Because people believe that low deposit home loans are a thing of the past.
In some ways they are right, but in other ways this is all wrong…
Low Deposit Home Loans Still Exist
Getting a home loan when you have a limited or low deposit is not as easy as it used to be, but low deposit home loans still do exist.
The Reserve Bank has restricted the percentage of new lending that banks are able to do when there is a deposit of less than 20% or equity of less than 20%, but the banks can still offer low deposit home loans. If you phone the banks or call into a branch and speak with them the message you will probably get is that you NEED a deposit of at least 20%.
If you talk with a good mortgage broker you might find that they can arrange a low deposit home loan with your bank or at least with one of the banks. Mortgage brokers have a range of banks that they can work with so if one bank cannot offer anything with less than a 20% deposit at a specific time, there may be another bank that can.
Mortgage brokers also have access to non-bank lenders and as those non-banks are not restricted by the same rules then they can be a very good option when you have a smaller deposit but still want to buy your first home. Unfortunately many mortgage brokers have limited experience with non-bank lenders so you want to find a mortgage broker that deals regularly with both banks and non-banks and The Mortgage Supply Company have some of the best brokers for this.
Low deposit home loans also are possible with new builds as these are exempt from the rules imposed by The Reserve Bank.
Again you should speak with a mortgage broker that has experience with funding new builds as there are some differences that most banks and regular mortgage brokers do not always consider and that can mean you end up have issues with your finance that can be extremely frustrating at what is typically a stressful time.
Your New Build Expert
If you choose to build a new home then you want to focus on the fun parts like choosing the design and the special features that make it a home like designing your kitchen and picking the colour scheme.
As a mortgage broker with both the personal experience of recently building a new family home and sourcing many new build finance packages for people building in North West Auckland which is one of the biggest growth areas in New Zealand.
Simply put – I have the experience that most bankers and mortgage broker lack.