Understanding Financial Personality Key to Mortgage Success

Understanding Financial Personality Key to Mortgage Success

Wellington, Wednesday 5 September 2018 - Understanding what drives people to make financial decisions could be critical in helping first home buyers get onto the property ladder.

Financial personalities play an important role in individual economic success. Do you like to spend money on your friends and family? Or do you prefer to spend it on experiences? Perhaps you prefer to save it in the bank?

Craig Pope, from Pope & Co Mortgages, says first home buyers should ask these questions of themselves and their partner to help maximise their chances of buying a home.

“Understanding what motivates you to spend or save money could be the missing piece of the puzzle when it comes to saving a deposit. For example, if you prefer to spend money on travel, then you’re probably not saving with the same intention as someone who believes money provides a sense of security,” says Craig Pope.

While there is some evidence of a slight slow-down in the housing market, Craig Pope doesn’t believe it will dramatically change the game for first home buyers.

“You still need to save a deposit and need be able to meet mortgage repayments. Every type of personality can still get into their first home, as long as they work to their strengths. If you like to spend money on dinners out, on friends and family, take that into account when planning your budget and keep money back for you. If you’re more of a power spender (buying things that make you feel good like a new car) remember to look past the novelty of a new item and consider the long-term benefit vs the benefit of putting the money towards a deposit.

“Importantly, before committing to a big purchase, take 24-48 hours out to think it through. If it helps, maybe boost your minimum KiwiSaver payments to 8 per cent (or more than the minimum), this will help you passively save without being able to touch it easily.

A one to two-bedroom property cost an average of $459,200 in the latest Trade Me Property Index.

“First home ownership is still achievable in Wellington - no matter how you spend or save money, first-home buyers can get on the ladder if you harness your financial smarts,” says Craig Pope.

ENDS.

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