So you want to buy your first home? Good on you! Here are three things to do before you even think about applying for a home loan or looking at properties.

1. Get your financial house in order

Make sure you’re the type of person that lending institutes will want to lend to. You can do this by:

Checking your credit score

Even things like honour or dishonour fees will count against you when it comes to applying for a home loan. Having a good credit history is important to lenders who want to know that their money is safe with you. If you find your credit score is not that flash, work on improving it by making sure all your bills are paid on time, avoiding honour/dishonour fees and paying back any over due or outstanding debt / fines.

You can check your credit score at www.mycreditfile.co.nz

Pay down short term debt

This will make you a more attractive person to lend to and will make it easier on you when do you get a mortgage as you wont have so many outgoings.

2. Save, save and save some more

The more you save the bigger the deposit you will have but also, lenders love it when they can see a regular savings history, it means you are reliable and likely to meet your mortgage repayments.

Deposit requirements vary from 5% to 20%, however banks must now ensure that the majority of their lending has at least 20% deposit, so aim for the 20% if you can.

If you qualify for a Welcome Home Loan the deposit amount is just 10%.

If you’ve been with KiwiSaver for at least 3 years you may also be able to use your KiwiSaver funds to go towards your deposit and qualify for the KiwiSaver HomeStart grant

3. Practice the art of compromise

Unless you've got an unlimited budget, chances are you’ll have to compromise on your first home.

The truth is that most first home buyers can’t afford their ‘dream home’ (most second and third time buyers still can’t!). Usually what we can afford and what we want are two different things, so be prepared to compromise. Make a list of must haves and nice to haves but keep an open mind. Remember: this doesn’t have to be your ‘forever home’, just your first home.

The information contained in this article is of a general nature and should not be taken as advice. It reflects the opinions of the writer only and does not necessarily reflect the opinions of New Zealand Home Loans.