IT’S ALL ABOUT MONEY

The main thing that stands between you and your dream home is probably money. Maybe a lot.
To get in the door, almost all first-time home buyers need someone to lend themthe money to make the deal happen. And in the vast majority of cases, this someone is a bank, and the loan is a mortgage.
This can be intimidating if the extent of your interactions with your bank to date was to pull out a credit card and maybe arrange an overdraft if you struggled from payday to payday in your first job.
But, fortunately for you, home loans are a big part of every bank’s business model and, while you may be looking at a sum of money that seems incredibly huge for you right now, home loans are the kind of things that lenders deal with every day.
To get approved for a home loan, there are two main things that you need to check off off. The first is to show that you have enough deposit savings to be eligible a loan. The second is to demonstrate that you can service the mortgage — in other words, make all the repayments during the decades it takes you to pay it turns off-once you have bought the house.
First, let’s see how you can gather this deposit.
1-Register a deposit
In recent years, saving from the deposit part of the home loan equation has been especially difficult for many first-time buyers.
Because house prices have risen quite rapidly and interest rates have been relatively small, the amount required for a deposit has also been increasing at a faster rate than many people have been able to save.
When house price increases occur faster than wage growth, it this means that people who save a deposit have to work very hard.
But people make it work. The momentum in house prices has weakened after the Covid madness, allowing wages to catch up at least a little — albeit from pretty far behind — and there are always ways to save money, even if all this it seems a little intimidating at first.
Many studies show that people overestimate what they can achieve in the in the short term, but underestimate what they can do over a longer period of time. If you set an ambitious but realistic savings goal, you may not be able to reach it immediately, but it could still be within your reach in the longer term.
There are a few common ways for people to save deposits.

2-Kiwi saver
If you are a potential first-time home buyer, KiwiSaver is probably your friend. If you are not already a member, you should join now. Yes, this is a way to save, but it also unlocks a number of benefits that could help you buy your first at home.
One of the most common ways to save a deposit for a first home, or complete the savings that you have, it is thanks to KiwiSaver. While the diet was set up to help us support ourselves in retirement, it clearly now has a double objective because it helps thousands of first-time home buyers every month.
If you are an employee of a New Zealand company and would like to purchase a house to live in this country, making the most of KiwiSaver is really a no- brainer.
You probably have a pretty good understanding of how the system works.
This has been the hot topic of personal finance articles since its launch in 2007.
Very briefly: if you are an employee, you pay at least 3 percent of your salary on your KiwiSaver account. Your employer is also making a minimum contribution of 3%. (Some employers are a little stingy and count their contribution as part of your “total compensation package”, which means you are actually contributing 6%, but you are supposed to be paid more for compensate for this. If you don’t think this arrangement works well for you, you could discuss it with your employer.)
Most people pay the minimum contribution of 3%, accompanied by a the employer’s 3%, but there are options to increase your own contribution and some employers are more generous.
Over time, this can be a great way to save money.
If you plan to save for five years or more, you could opt for a growth fund, which will give you more exposure to stocks (the stock market). Returns of these funds can be a bit bumpy, but should deliver for you over time. If you plan to buy earlier than five years, you could choose a less risky fund — but it should still give you a higher return than what you would get by keeping your money in the bank.
When it comes time to withdraw from your KiwiSaver account, you can withdraw all the money from your fund except for $1000. You may also be eligible for free money from the government. More on that in a minute.
KiwiSaver has the advantage of being out of sight. If you get your investment settings from the outset — you can seek the help of a financial advisor to this or contact your KiwiSaver provider — you can leave it checked in the background, slowly growing up and preparing for you to call him when the the time is coming.
You don’t have to worry about your KiwiSaver’s investments do (that’s the fund manager’s job) and there is no chance that you will tap get in there and undo your hard work of saving, because the money is blocked until it’s time to buy your house or retire, whichever comes first. Let’s go I hope this is the house.
To withdraw your KiwiSaver money, you will need to intend to live in the property for at least six months.
3 – How much should you contribute to KiwiSaver?
If you have not changed your KiwiSaver settings, it is likely that your
KiwiSaver is set at a default contribution of 3%. It’s not bad, but it won’t put you on the fast track to saving a security deposit.

If you make $70,000 a year and save 3% of that, plus another 3 per hundred from your employer, and you are in a balanced fund, you will save about $23,000 in three years. If you increase your contribution to 10 percent of your income, you could save more than $50,000 over the same period.
Mortgage broker Glen McLeod tells me he sees people coming together a few large chunks of money in their KiwiSaver accounts.
‘Some people have been saving for a long time, but others, for example a couple who just put their heads down and got up and stopped spending and saving difficult, and if they increased their KiwiSaver payments from 3% to 8% by one hundred and they did it for 12 months, it really blows up the funds. It is a seriously good addition to a repository.