As 2024 unfolds, it’s clear that first-home buyers are in for an exciting journey.

With predictions of rising house prices and a potential dip in interest rates, now might be the perfect time to make your move onto the property ladder.

But before diving in, it’s essential to prepare yourself for a home loan pre-approval, and we’ve got three crucial tips to help you get there.

Tip 1: Tackle Your Debts Head-On

One of the biggest challenges for first home buyers is managing existing debts. Whether it’s credit card balances or personal loans, these debts can significantly impact your ability to secure a mortgage.

To understand it better, let’s say that for every $10,000 of debt, your borrowing capacity could drop by around $50,000.

This is because your monthly debt payments reduce your disposable income, which banks consider when assessing your loan affordability.

How can you improve your chances of getting A low-interest loan?

To improve your chances, focus on reducing or eliminating your debts. By doing so, you’ll increase your financial flexibility and enhance your loan application. At Kiefer, we help people buying first home throughout their journey. Our homes come with some exciting offers that make your purchase even more affordable.

Tip 2: Build a Homeownership Budget (A must-do for First Home Buyers)

Creating a detailed budget is more important than ever, especially after the implementation of the Credit Contracts and Consumer Finance Act (CCCFA) in 2021. These regulations have made it tougher for first-home buyers to secure loans, as banks are now more vigilant about scrutinizing your spending habits.

However, amendments to these regulations in 2022 introduced some much-needed flexibility. Banks can now have conversations with you about which expenses are regular and ongoing, and which ones will disappear once you have a mortgage, like canceled subscriptions or reduced dining out. This change means that your budget plays a crucial role in your loan application.

Solution

Regularly review your spending and look for areas to cut back, such as unnecessary subscriptions or dining out.

Tip 3: Assess Your Home Loan Affordability

Understanding your current home loan affordability is a key step toward buying your first home. By getting a clear picture of where you stand financially, you can make informed decisions and set realistic goals for improving your borrowing capacity.

By taking these steps and staying proactive, you’ll be well-prepared to take advantage of the opportunities that 2024 has to offer.

With the right strategy and professional guidance, your dream of homeownership is within reach. If you are looking for new homes that are not just affordable but are also beautiful to experience a modern lifestyle, you can contact Kiefer. We build homes that stand out not just for their design but for being at the most convenient locations in Auckland.

To know more about our upcoming projects, you can contact us at info@kiefer.capital.

You can also check our blog https://kiefer.capital/news/avoid-these-common-first-home-buyer-mistakes