As a first home buyer, you're probably aware that you can use your KiwiSaver to help with your deposit.
But how do you actually get that money out in time?
In this week’s update, we’ll break it down step-by-step to ensure you're not caught short when it's time to pay your deposit.
Before we dive into the process, let's quickly recap what you need to know about the KiwiSaver first home withdrawal:
1. Start Early: Get a Pre-Approval from your KiwiSaver Provider
Even if you're months away from buying, it's a good idea to get pre-approval for your KiwiSaver withdrawal. Here's how:
This step will give you a clear idea of how much you can withdraw, which is very important for planning your property purchase.
2. House Hunting: Keep Your Mortgage Adviser in the Loop
As you start seriously looking at properties, it pays to keep your mortgage adviser informed. We can guide you on:
We can also advise you on how to coordinate between your KiwiSaver provider and any other parties involved in the home buying process.
3. Making an Offer: Time to Apply
Once you have a signed sale and purchase agreement, it's time to formally apply for your KiwiSaver withdrawal. This is what you’re going to need:
Time is of the essence here. You’ll need to submit your application to your KiwiSaver provider as soon as you have all the documents ready. Most providers can take up to 15 working days to process your withdrawal, so we will need to factor this into your timeline.
4. Work Closely with Your Lawyer
Your lawyer plays a crucial role in this process. They'll need to provide a letter of undertaking to your KiwiSaver provider confirming details of the property purchase. They will also be the ones to receive the funds from your KiwiSaver provider into their trust account and manage the payment at deposit and settlement time.
Second Chance KiwiSaver Withdrawal
If you've owned a home in the past and now find yourself in a similar financial position to that of a first-home buyer, then you may be eligible for the Second Chance KiwiSaver withdrawal.
Who Can Use It?
You might be eligible if:
Things to Think About
Taking money out of your KiwiSaver is a big deal. We'll help you understand:
The Second Chance KiwiSaver withdrawal isn't just about money - it's about giving you another shot at having a place to call your own. And as your mortgage advisers, we're here to help you make that happen!
Tips for a Smooth Stress-Free Process!
Communication is Key: Keep in regular contact with your Mortgage Adviser, lawyer, and real estate agent throughout the process
Plan for Delays: While KiwiSaver providers aim to process withdrawals within 10 working days, it's wise to allow extra time for any unforeseen issues.
Auction Purchases: If you're buying at auction, make sure to discuss your options with a Mortgage Adviser and lawyer well in advance, as typically a 10% deposit is required on the day of the auction. You might be able to arrange early access to your funds or a temporary facility to pay the deposit on time.
Keep Contributing: Continue your regular KiwiSaver contributions right up until you make your withdrawal application. Every little bit helps!
Understand the Limitations: Remember, KiwiSaver funds can only be used for the deposit or the final settlement payment. You can't use your KiwiSaver withdrawal for things like lawyer's fees or furniture and appliances.
So there you have it. Using your KiwiSaver for your first home deposit can be a game-changer, but as you can see, it requires careful planning and timing.
Don't wait until you've found your dream home. Start the process early, stay organised with your documents, and maintain open communication with all parties involved.
The good news is, we can help manage a lot of this for you and if you follow these steps, you'll be well on your way to getting your KiwiSaver funds out in time to secure your first home. Feel free to reach out if you need a hand!