Beyond the Deposit: Three Critical Post-Purchase Priorities

The exhilarating moment when you receive the keys to your first home marks just the beginning of your homeownership journey. After the champagne toast and unpacking those moving boxes, there's a crucial next chapter that many first-time buyers overlook. What exactly should you be doing now to protect both your investment and your future?

We dive into three essential considerations that could save your financial future. First, it's time to reassess your KiwiSaver strategy. Having depleted this fund for your deposit, you're now looking at decades until retirement access. This dramatic shift in timeframe might warrant switching from a conservative first-home fund to something with greater growth potential – especially if you're in your thirties with 30+ years ahead.

Your mortgage represents a significant financial commitment, but have you protected your ability to meet those payments? While home insurance is mandatory, personal protection often gets overlooked. We tackle the common misconception that "ACC will cover me" – a dangerous assumption when you realize ACC only covers accidents, not illnesses. If cancer or another serious health condition prevents you from working, you'll need additional safeguards to avoid losing the home you worked so hard to secure. Income protection, mortgage protection, and life insurance deserve serious consideration in your post-purchase planning.

Finally, we stress the importance of maintaining a financial buffer specifically for mortgage payments and unexpected home expenses. Those water tanks can explode, roofs can leak, and surprises await even the most meticulously inspected properties. Having two to three months of mortgage payments saved provides crucial breathing room when life throws curveballs your way. Don't skip those takeaway coffees for months just to pour every last dollar into your deposit – maintain that emergency fund habit you developed while saving.

Ready to dive deeper into the home-buying process? Check out our previous season dedicated entirely to first-time buyers. From deposit strategies to settlement day, we've covered the complete journey to homeownership. Subscribe now and ensure your property investment remains protected for years to come!

Chapters

• 0:20 Welcome and Episode Introduction
• 0:30 What Happens After Getting Keys
• 0:49 Reviewing Your KiwiSaver Fund
• 1:34 Insurance for Yourself
• 4:13 Emergency Buffer for Mortgage Payments
• 6:23 Recap and Previous Episodes

Transcript

Speaker 1: 0:10

Hello and welcome back to that Homelon Hub. Hello, kunj Kia. Ora, that was a bit of a pose, kunj, today. Picture this We've got a client, they bought a house, all exciting. They've got the keys, they move in. What happens then?

Speaker 2: 0:29

Yeah, let's talk about that. Let's talk about what happens after, or like a couple of key things to think about after you buy your first home. All right, so one thing I thought about was your KiwiSaver. So you've used up your KiwiSaver to purchase your first home as your deposit. Now you can't touch it anymore until you're 65. Yeah, so imagine you're, you know, early thirties, and now you've got another 35 years of KiwiSaver. What do you do with it? So it's a good time to review the fund you're in. This is not financial advice, because I'm not a KiwiSaver expert, but good time to review the fund because when you're using it to buy your first home, there's genuinely a first home buyer fund that most providers have, which is non-aggressive, usually low risk, because you don't want to risk losing your whole deposit if you're about to buy a house.

Speaker 1: 1:32

So normally you would be on a low risk profile but it wouldn't generate you as much return. But once you bought a house, then you could reconsider what sort of fund you're in.

Speaker 2: 1:43

Yeah, Awesome, yeah. So just to reconsider that and just make sure that you know it's working the way you want it to work.

Speaker 1: 1:50

Interesting. Yeah, I don't think a lot of people think of that. No, okay, cool Number two.

Speaker 2: 1:56

Number two. So number two obviously you have to have home insurance right when you buy your home. Absolute must, it's a must, it's a condition of the banks, or the lenders as well, to have insurance. But have you got insurance for yourself?

Speaker 1: 2:16

So that's what? Hold on, wait, what is insurance for yourself? What does it mean?

Speaker 2: 2:20

Well, let's just say if something happens to you right, you get sick or something and you're not able to work, you're not able to earn an income. That income is to pay for that loan. Acc will cover me. Yeah, acc will cover for accidents. So just to point that ACC, if you have an accident they'll cover 80%, but if you get sick they're not going to cover you.

Speaker 1: 2:42

Yeah, absolutely. And this is something really important to note, because look me as an insurance advisor. When I talk to my clients and I talk to them about the importance of having income protection, mortgage protection, we often get that response ACC will cover me. Acc will not cover you if you've got cancer. Yeah, If you just had cancer as a result of sun exposure, for instance, yeah, you know, that's not an ACC related topic no no.

Speaker 2: 3:11

Yeah so sickness, more so. Then, yeah, imagine you know you have an asset that's close to a million dollars, that you probably have a debt of 80% to 90%, and you get sick and you can't pay it. That'd be pretty crap if you had to sell that asset after you work so hard for it. So, yeah, it's to think about having some life insurance, income protection, and we have amazing insurance advisors around that can help you.

Speaker 1: 3:45

Yeah, so apart from me as an insurance advisor, we also have a fantastic team member, rebecca. She's joined our crowd a few months ago. If you've missed an episode with me and Rebecca, you know, go a few episodes ago, search for it. We've covered some important topics there. But yeah, absolutely something to think about when you buy a house is get that insurance reviewed. If you already have something in place, fantastic, but get it reviewed If you don't have anything at all, you should be getting something, because you never know what's around the corner.

Speaker 2: 4:13

Yeah, and then point three. I thought I'd just do three points. Point three obviously, when you buy a house, we recommend that you have some cash set aside, right, like to pay for the registered valuation and lawyer fees and things like that, after buying the house. Yeah, recommendation is also to have that at least two mortgage repayments saved, tucked away in a rainy day account, sort of thing. That just gives you a bit of leverage in case there's a glitch or something in terms of your pay, or if you like went on a holiday and you're like, oh, actually I want to skip that mortgage payment because I've got, you know, two pay saved, sort of thing.

Speaker 1: 4:58

Wow, you're very kind to them. You're saying two.

Speaker 1: 5:01

I usually say three months You're saying two, I usually say three months. You should have a buffer for at least three months. And I'll tell you the reason why I said that. Because, again, with insurances, when you get a mortgage insurance, you've got a stand down period and you can wait either four weeks, eight weeks or 13 weeks for the insurance to kick off paying. If you wait four weeks your insurance is usually more expensive, if you wait eight weeks it's a bit cheaper, 13 weeks even cheaper. So normally I say if you have at least three months buffer for your mortgage repayments and then mortgage protection kicks in, that's usually a good balance to have. So yeah, absolutely Calculate what your repayments.

Speaker 2: 5:39

Mine was two pays.

Speaker 1: 5:40

So yeah, when you go on holiday, not when you get sick, yeah, so if we start with at least two to three months so two repayments to three months repayments you guys will be in a very safe way. So the way you, you know, worked hard and save that money for your first home deposit. You know you can do this again. So go a little bit hard, you know. Skip on those takeaways, skip on those coffees, put the money aside, because again you just don't know what's going to happen. You know we had a client that bought a house. The water tank blew up. We had a client that bought a house and discovered holes in the roof, you know.

Speaker 1: 6:15

So all sorts of things can happen and you need extra buffer. So don't spend all of your money as a deposit. And this is where you know, we try to usually pull you back and go. Don't be emotional, don't buy the house with emotion, because you will overspend it. Correct? Yeah, awesome, I really love your three points. This is great. Okay, do a quick recap of just the subject line. Three points Go.

Speaker 2: 6:40

Okay, three points Review. Quick recap of just the subject line. Three points Go. Okay, three points Review your KiwiSaver Done. Make sure you have some sort of protection for yourself, so life insurance, and then have some buffer in your savings account.

Speaker 1: 6:51

Love it, absolutely love it Awesome. Thank you, kunj, so much. And, for those that have missed, kunj and I actually did a whole entire season of episodes on how to buy your first home and this is a sort of a more of a catch on to that. What happens after. So if you are looking to buy your first home, don't worry, there are episodes for you. So just go back a little bit behind and have a listen, search through those hundreds of episodes that we've done. Use the keywords.

Speaker 2: 7:18

Use the keywords Awesome.

Speaker 1: 7:19

Thank you guys so much and talk soon. Thanks, bye.