First Home Buyer Guide: Step 2 - Understand What You Can Afford
Looking at homes online is exciting. It’s easy to start imagining yourself living in your dream home. However, before becoming too attached to a property, it’s helpful to understand your overall budget and the costs that can come with home ownership.
Important: This guide provides general information only and does not constitute financial advice, lending advice, or a recommendation to purchase a property. Whether a home loan is right for you will depend on your individual circumstances.
How Much Could I Borrow?
When buying your first home, understanding your budget involves more than looking at how much you may be able to borrow. It also involves considering the ongoing costs associated with owning and maintaining a home.
Taking the time to understand your financial position can help you make informed decisions throughout the home-buying process.
It’s not just about the house price
The purchase price is only one part of the cost of owning a home. Other costs may include:
- Mortgage repayments
- Rates and local council charges
- Home and contents insurance
- Property maintenance and repairs
- Utilities and household expenses
- Moving costs
- Unexpected expenses
A home should fit your lifestyle and budget, not leaving you worrying about every extra expense.
Understanding your budget
Before you start your property search, it may be helpful to understand your current financial position, such as where your money is going each month.
Look at Your Income
Consider your regular income sources, such as salaries, wages, and any other reliable earnings.
Review Your Expenses
Review your spending over the last few months and identify regular expenses and commitments. You’d be surprised at how quickly all those small expenses add up.
This may help you understand how your income and expenses contribute to your overall financial position.
Think beyond getting the loan
For many first home buyers, getting approved for a home loan feels like a major milestone. However, home ownership comes with ongoing financial commitments and responsibilities.
The goal isn't simply to buy a home. The goal is to own a home whilst still feeling financially comfortable.
Understanding these commitments and how they fit within your individual circumstances is an important part of the home-buying journey.
Ready to learn more about home loans?*
Understanding what you can comfortably afford is an important step before starting your property search.
If you're considering purchasing your first home, the team at First Credit Union can provide information about our home loan products and explain the home loan application process.
Take the Next Step
Complete our Home Loan Enquiry Form and one of our friendly team members will be in touch to discuss our home loan products, answer your questions, and explain the information we may require as part of an application
*Lending criteria, terms and conditions apply. First Credit Union Incorporated is not a registered bank. Fixed and floating options are available. Rates are subject to change, for more information about our home loan rates, visit www.firstcu.co.nz. First Credit Union's normal lending criteria and T&Cs apply. Subject to responsible lending enquiries. Property is to be owner occupied.