We’re about to announce a new option of shared home ownership, and it may suit people that like the concept but are not eligible for Kainga Ora’s First Home Partner.
First Home Partner is a good option for people that fit the criteria and want to buy a brand new home, but there are people that this just does not work for.
The two key problems with First Home Partner are:
- The household income needs to be under $130,000 for the last 12-months.
- This is only available on brand new home
Both of these are non-negotiable.
The other option that mortgage advisers will often use is the shared home ownership offered by YouOwn. This is a business that allows shared home ownership with no income cap and on both new and existing homes BUT there is a cost / equity charge.
New Option About To Be Released
There is good news with a new option of shared home ownership about to be released.
This new business has plans to release a shared ownership option in August, and there will be a number of potential first home buyers that this may suit.
There are differences when we compare this to both Kainga Ora’s First Home Partner and with YouOwn. In many ways this new option is taking the best from both and creating a real solution to many first home buyers problems.
Here are some key differences:
There is no income cap – this removes one of the biggest hurdles with the First Home Loans option. When buying a home the bank wants a bigger income for the mortgage, but Kainga Ora caps the income at $130,000 over the last 12-months. This often means that families miss out as they are deemed to earn too much.
You can use this to buy either a brand new home or an existing home – this means that you are not restricted and can buy a new home that suits you and your family. Often an existing home might look like better value for money, or in many areas the new homes are just not available.
There will be no equity charge – with YouOwn there is an equity charge that’s like paying interest, and this needs to be factored in when calculating what you can afford. In many cases this means you cannot afford as much and that stops you buying the house that you really want.
We are waiting to see all of the final detail, but it looks like they have addressed the key problems and are creating an option that is going to suit a lot more people.
There may be a couple more features that will also appeal – we have discussed them but they have not yet been confirmed. Hopefully these will be included, but we cannot say much yet.
Has This Sparked Your Interest?
This is going to be really popular when it is released.
We’ve been asked to get anyone interested to complete an initial assessment and register their interest. Those people will be given preference when this new option of shared home ownership is released.
To help, we have created a guide that explains a bit more.
You will also be provided updates as this gets closer to the release date, and as the shared ownership criteria is confirmed.
Mortgage Managers is excited to be able to share the news of this new option of shared home ownership, and look forward to the day that it is released and can help many more first home owners.
