DATE: 04/06/2013
CATEGORY: Blog, First Home Buyer, Home buying, Mortgages

kick-starting your first home loan with KiwiSaver

wooden kiwi and money mychillybin100105_391_small cropped for blogWhile KiwiSaver is mainly about saving for your retirement you may be able to withdraw some of your KiwiSaver savings, or receive a one-off First Home Deposit Subsidy payment from the government to help you with the purchase of your first home.

There are two benefits for KiwiSaver members who are saving for their first home:

  1. If you’ve been a KiwiSaver member for at least 3 years, you may be able to withdraw some of your savings to put towards buying your first home.
  2. You may also be eligible for a one-off payment from the Government to help you. You can get $1,000 for each year you’ve been contributing to KiwiSaver, up to a maximum of $5,000 for each member. Income and house price caps apply. Find out more by visiting the Housing New Zealand website.

If you’re planning to access KiwiSaver benefits you need to be aware of dates and timings or you’ll miss out.

To help you get your head around the process we’ve tapped into one of our experts, Taryn Playle from Wellington legal firm The Law Company. Her savvy tips below will give you the edge when kick-starting your first home loan with KiwiSaver:

1. If you are eligible for the First Home Deposit Subsidy of up to $5,000 (through Housing New Zealand) this can be applied for as soon as an Agreement for Sale and Purchase is signed. Click here for the link to the application form.

Be aware the process can take up to four weeks so don’t leave it too late!

Once Housing New Zealand has approved the subsidy they send your lawyer documents for you to sign. Your lawyer then has to send the signed documents back to Housing New Zealand at least five business days before settlement. The Subsidy funds get deposited directly into your lawyer’s trust account to use for the settlement.

2. We recommend that you ask your KiwiSaver provider for a pre-approval so that you know that you are eligible to withdraw your own KiwiSaver funds.

The withdrawal of KiwiSaver funds is then applied for when the Agreement for Sale and Purchase is unconditional (you have satisfied all of your conditions) and it can take up to ten working days to process (depending on the provider). Most providers have the application form online.

Your lawyer will have to sign an undertaking letter and send this to your provider. Your KiwiSaver funds get deposited directly into your lawyer’s trust account to use for the settlement.

3. The settlement date should be at least four weeks after you sign the Agreement for Sale and Purchase and at least three weeks after the unconditional date to allow enough time for all of the applications to be approved and funds to be transferred to your lawyer.

Note – you cannot use any KiwiSaver funds to meet the the deposit payable once an Agreement for Sale and Purchase on a property you are purchasing becomes unconditional.

You also cannot use any KiwiSaver funds received after settlement date – so you need to ensure all timing aspects above are followed to the letter. On this note check that your bank will accept your KiwiSaver funds as counting towards your contribution to the purchase.

Don’t forget to let your lawyer know as soon as possible that you are withdrawing your KiwiSaver funds and/or applying for the First Home Deposit Subsidy.

For more information and for true expert advice about KiwiSaver contact Taryn Playle at The Law Company – she’s always happy to help – www.thelawcompany.co.nz.

 

 

 


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Posted in Blog, First Home Buyer, Home buying, Mortgages

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