This article is a great account of the top tips from a young couple – Shaelin and Tyrell Tamaki on the journey to purchase their first home in 2022.
We conquered the near impossible, we purchased our first home in 2022 in our early 20’s.
After years of saving on minimum wage and months of no spending, we managed to get over the line and get an offer accepted on a 3 bedroom home with heaps of potential in Hamilton!
Here’s what we did to make it happen;
Starting a spending plan:
First and foremost, I think having a spending plan is the most important thing in this whole process. My partner and I were so fortunate that we had similar goals in terms of home ownership, so we were able to work together from the beginning to get our saving underway.
We sat down and wrote up spending plan. We wrote one each, detailed out our income, bills, expenses and how much we were going to save into each account. If our income changed or we found we needed a little extra here or there, we adjusted the figures and started again.
Something that I discovered about a year in is that it is important to keep a little aside for you. Personally, I found I was so set on owning a house that I would only give myself $20 a week to spend on work lunches & whatever else I needed, it didn’t go far at all. I felt like I was working so hard and focusing solely on saving but we were still so far away from purchasing a home, it felt impossible.
I realised that I wasn’t allowing myself to enjoy the journey – for me this meant being able to spend on things I enjoyed. I had a chat to my partner and he agreed that we should be able to enjoy a bit of the money we work so hard for, so we adjusted our plans and tried again. This allowed us to go on the occasional date and me to do little things I love like op-shopping and getting coffee, it really did help. Moral of the story, allow yourself to enjoy a bit of your money, don’t be too strict or you’ll forget to enjoy the journey!
Saving:
Saving obviously has a very important part in all this,
we didn’t find saving too hard, we wanted a house so badly and we knew saving is what it would take. We wanted to save for this together, so I added him to my main savings account to save for our house, and as travel was another goal of ours, we created a separate travel savings account as well as a personal savings each. I think that keeping these accounts separate was a huge help as we were able to prioritise one over the other as our income changed. We knew exactly what we had for each and never dipped into them.
We wrote down in the spending plan how much we wanted to save into each account and stuck to it. We did this for 5 years straight, saving as much as we could every pay. Most of the time, this wasn’t much. We were both on minimum wage and for three of these five years my partner was studying and only working when he had a free day. I was flicking between part-time & full time work so we saved as we could afford to.
Getting Prepared:
Given the ever-changing market, we kept an eye out on house prices and first home grants and offers. It was scary seeing everything getting more and more expensive, but we continued saving. It dawned on us that buying in Hamilton was beginning to look impossible, so we started looking around Huntly and Ngaruawahia, both of which still seemed very expensive.
Once we hit around the 25k mark in our house savings, we decided to see a mortgage broker to find out where we were at and to get a better idea of what we needed to be doing.
She told us to keep saving as we were and to start preparing to apply for pre-approval. This meant that we had 3 months to clear our accounts of all unnecessary transactions as the banks lending criteria was getting stricter given the current climate. We took this information on board, knowing we couldn’t buy so much as a coffee through our account. We allowed ourselves a small amount of cash to spend each week, the only money out of our account was savings and bills. This was by far the most difficult stage of the process. It felt like there were constantly family dinners, events or celebrations on, we often just had to pool together our cash and get the cheapest options available so we could still attend. It was really frustrating after awhile – but we kept on.
During this time, we were so fortunate to have such great friends and family that understood what we were doing and didn’t expect too much from us. After what felt like the longest 3 months of our lives, we went back to our mortgage broker to re-assess. As we couldn’t spend, our savings had gone up considerably and we were able to apply for our pre-approval! Our Mortgage broker walked us through everything, she advised us to continue doing what we were doing in case we needed to send more statements further down the track, so we continued not spending. We got in touch with Kiwisaver to see how much we could get out, we then sent everything through to our broker and she did the rest, we sat back and waited.
We had never checked our emails so much, we were so excited and scared, knowing that this was the make or break for us, and we did not want to go back to square one.
The house hunt
After about three weeks, we got the email that we had been pre-approved.
We couldn’t believe it, it was the best news and we were absolutely over the moon. Our hard work had paid off, and it finally felt like it!
While we were waiting to hear about the pre-approval, the house prices in Hamilton had started to drop ever so slightly and some criteria for a home grant had changed and we were now eligible! We applied for the grant as soon as possible and heard back almost immediately, we were approved! We started trawling through trade-me for houses, booked out our weekends with open-homes and kept an eye on our watchlist. We tried our best to keep a level head when looking through homes, get a good feel for it and decided on our non-negotiables.
After seeing 5 or so houses, we had one that met all our criteria and we could do up a little. With our parents there for support, we put in an offer.
Unfortunately, the agent called us and said that someone else had put in an offer well above asking price and if we could match it. Needless to say, we lost that one.
We were deflated but didn’t want to lose traction. We went back to trade-me and started adding to our watchlist again. We called the agents for the houses we were most excited about. Out of all of the agents we called, only one was willing to take us through a house. We thought this was odd and were a little disappointed, but we went and had a look at that one and fell in love.
We put an offer in and after a bit of back and forth with the owners, we finally met in the middle and our offer was accepted!
Victory
All these years, all the saving and struggling had paid off and we couldn’t believe we’d done it. It still hasn’t set in that we made it happen on our own.
It’s hard, but it is possible and I believe anyone can do it. All it takes is time, discipline and a decent spending plan!
The handbrake
We got a call from our mortgage broker saying that she needed to catch up with us. We didn’t know whether to be excited or scared, so we went in totally blind to the handbrake that was about to go off. Our pre-approval had been pulled due to the banks no longer accepting loans with less than a 20% deposit. Our broker had fought all she could, but they wouldn’t do it for us. We were back to square one with the banks, applying to everyone we could think of to try and get approved again.
We got in touch with our lawyer and agent as we now needed an extension on our 14day finance condition. The owners agreed to give us a 10 day extension, so the rush was on!
It was a long wait, every bank had said no but one. We waited and waited, hoping and praying that they would pull through for us. After a long time of waiting, our broker called and said that they had accepted our application and we were approved again, if we could come up with a couple thousand to meet the required amount in our deposit. Discouraged but not defeated, we worked out how much extra we could save and still fell a little short. We decided we would ask one of our parents if they could loan us the remaining amount to get us over the line as we were so close but just couldn’t make it, and thankfully, they were able to help.
Victory take 2
We had done it, again! We were approved and things were moving fast! Our broker was ordering a valuation for us, we were organising bank accounts with the new bank and getting quotes for insurance! It was all go and we couldn’t be happier.
Top Tips
I often hear about people wanting a house but not wanting to give up their lifestyle to allow them to save to get there. Here are some tips that we found helped us keep our lifestyle while saving;
- Birthdays and Christmas; We started having people around for these occasions, and instead of asking for things, we started asking for vouchers or cash. We love road tripping around so gas & food vouchers were the most handy and provided us that freedom while we were saving.
- Get savvy with your hobbies. Hobbies can take up a bit of money sometimes, but they often provide a relaxing outlet making them hard to give up.
Personally, I really enjoy selling & buying second hand clothes. While we couldn’t use our accounts, I realised that I couldn’t keep this hobby as I couldn’t have it show up on my account. I did some research and ended up selling clothes through a store that sells things on your behalf in exchange for store credit or cash. This allowed me to continue with a hobby that I loved without risking our loan application! - Think outside the box when going on dates or meeting with friends! For us, this meant not going out for breakfast as often (we still worked this into our budget occasionally) but instead we’d pick up a $1 frozen coke or ice cream and find a spot to watch the sunset. We had a lot of popcorn movie nights & made a date night out of trying to bake new & weird things, or every now and then we’d take $20 to time zone and see how long we could make it last. We had just as much of a good time and spent a fraction of the amount a date would usually cost!
- Keep an eye on the market & offers that could apply to you. You’ll only buy your first home once so look at anything and everything you can. We definitely recommend getting someone (in our case our mortgage manager) to explain all the ins and outs to you before you apply for anything as some grants have hidden nasties that’ll bite you later, so be weary!
- Remind yourself of the bigger picture. It’s always going to be tough and tempting to throw it into the ‘too hard basket’ but allow yourself to dream. How would you like to set up your new home? How can you live differently or better in a different space? What furniture do you have that you could repurpose in a new space? Get excited about it!
- Find people that you trust. Our mortgage broker was extraordinary, she took the time to explain everything to us and go over all our options. When things got messy, she worked so hard to find solutions and make sure that we still had options. We trusted her entirely and knew she was working as hard as possible to get the best deal over the line for us. We knew our lawyer personally so we knew that we were in good hands. Having a good group of people around you that you trust is crucial to making this stressful process as stress-free as possible!
- If you find an agent that you really like, you can ask them if they will work with you to look through and hopefully buy a home – even if the house isn’t listed with them. This can be helpful because the agent is now on you side fighting for you, rather than the agent being in the middle of the seller and buyer! The agent we used was amazing, she explained everything so well which we needed being first home buyers and she made everything so easy!
Living with the parents
While we had worked hard and saved on our own, we were fortunate enough to be living with my partners parents and paid only a small amount of board while we were saving, this was a huge help and assisted us in achieving our goals immensely. We are so grateful that it was an option for us but we know that this isn’t an option for everyone, and while it was a huge help, we really believe that it is doable for anyone in any circumstances. This is just our story and how we managed to get over the line with the support of those around us.
- Shaelin & Tyrell