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The share market around the world
is taking a battering due to Covid-19 and there is a lot of uncertainty about
how much funds will be available under your KiwiSaver to use towards your first
home purchase.
If you are a first home buyer, and planning to use your KiwiSaver funds, you should now be discussing with your provider to switch your investment into a cash fund. Switching to a cash fund would lock the investment into a low risk fund which is largely unaffected by the share market.
We recommend when entering into a Sale and Purchase Agreement, you add a finance clause which includes your borrowing from the Bank and your withdrawal from your KiwiSaver. Remember to discuss this with your Bank, KiwiSaver provider and your Lawyer. This way when you make your offer you will have a clear idea of what funds you have at your disposal.
The question you should ask is how soon you need the funds. If the answer is sooner rather than later, you should talk to their provider about whether you should switch to a cash fund.
If you have already signed up to purchase your first-home and not sure whether you will have sufficient funds on settlement, please talk to your Lawyer and your Bank. Your Lawyer and Bank can help you during this time and provide you with some options.