How to Get Your KiwiSaver Out in Time to Pay Your Deposit: A Little Guide for First Home Buyers.

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.

Understanding the KiwiSaver First Home Withdrawal

Before we dive into the process, let's quickly recap what you need to know about the KiwiSaver first home withdrawal:

• You must have been a KiwiSaver member for at least three years.
• You need to intend to live in the home you're buying (it can't be an investment property).
• You must leave at least $1,000 in your KiwiSaver account.
• This must be your first time withdrawing from KiwiSaver for a home purchase.

The Step-by-Step Process

1. Start Early: Get 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:

• Contact your KiwiSaver provider directly or visit their website.
• Look for an option to request an estimate or pre-approval for a first home withdrawal.
• Fill out the required form, providing details like your customer number and IRD number.

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:

• How your KiwiSaver withdrawal fits into your overall home financing strategy.
• Any additional steps you might need to take to ensure a smooth process.
• Potential impacts on your mortgage application and approval.

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:

• Valid photo ID
• Proof of address
• Your signed sale and purchase agreement
• A completed first home withdrawal form (may need to be witnessed by a JP or lawyer)
• A letter of undertaking from your solicitor

4. Submit Your Application ASAP

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.

5. 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
• Confirm details of the property purchase
• Receive the funds from your KiwiSaver provider into their trust account
• Use these funds as part of your deposit or settlement payment

Tips for a Smooth Process

1. Communication is Key: Keep in regular contact with your Mortgage Adviser, lawyer, and real estate agent throughout the process
2. 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.
3. Auction Purchases: If you're buying at auction, make sure to discuss your options with your 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.
4. Keep Contributing: Continue your regular KiwiSaver contributions right up until you make your withdrawal application. Every little bit helps!
5. 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.

Final Thoughts

Using your KiwiSaver for your first home deposit can be a game-changer, but 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. With these steps, you'll be well on your way to getting your KiwiSaver funds out in time to secure your first home.

Cheers, Linda✨

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