If you’ve bought yourself a Kiwibuild property you may find yourself in a position where you’re unable to get additional lending on the property, or
rent it out for a certain period of time (often between 2-3 years depending on the development & agreements signed).
While things certainly seem rather restrictive, in reality you’ve just bought yourself ample time to get to a stronger financial position. The embargo
period goes by quickly when you are focusing your energy on saving up for a bigger deposit, strategising and paying down your debts.
Once you are free to invest, you have two options (in general) to weigh up:
1. Keep living in the Kiwibuild and buy an IP: You could look at topping up the mortgage on your home with the help of a registered valuation to fund
a deposit towards your IP. This is particularly the case for many properties in the current market where prices are appreciating quickly. Many
homeowners are finding their homes worth more than what they had paid for. This coupled with any savings and debt reductions over time could put
you in a strong equity position to continue borrowing. In terms of serviceability, some lending criteria has gotten slightly easier (depending
on financial position) for certain clients, so your serviceability may also be in a stronger position too. It’s worth getting this part checked
out by your mortgage adviser if you’re planning on purchasing IPs in the future.
2. Keep the Kiwibuild as an IP and buy yourself a new home to move into: By the end of the embargo period, your Kiwibuild building is likely to still
be in very good nick saving you maintenance and repair cost in the long term. Lower operating costs...
