Buying a House in New Zealand

When paying your deposit for your new home cash is always preferable but not the only way. Here are a few alternative ways to pay your deposit.

1. Cash - Always the most favourable and still the most popular way to pay, however your money may be tied up elsewhere, in investments and you can’t wait for the money to become available, you may consider other methods.
2. A Pre-Approved Deposit - This method is a great way to pay for auctions and tenders. This cash-deposit is a lender commitment to pay the seller a deposit an amount of up to 10% of the value of the property. This happens as soon as the sale goes unconditional.
3. Deposit Bond - A deposit bond is very similar to a cash deposit however the bond is a type of IOU to the vender. What it does is guarantees the deposit until settlement. When settlement for the property occurs the lender will then pay the vendor the full price including the deposit.
4. 100% Loan - Not very common here in New Zealand, but still possible. You need to talk to you lender or broker about acquiring a 100% Loan.
5. Limited Guarantor Loan - this type of loan is a home loan where it is possible for family members to assist the borrower. The family members can help the borrower secure the loan by using their equity from their homes. The usual equity is from homes, however it has been known where some lenders will allow family members to assist in the repayment of loans thus giving the borrower a higher borrowing capacity. Of course limited guarantor loan’s are a great way for first time buyers, low income families to get into the property market, however they can also be used for larger investment properties.

So don’t let that dream property escape you – now you have ample way to pay that deposit. How you get the rest of the money is up to you.


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