A Squirrel case study: Charlie & Kyle

First Home Buyers Written by Squirrel, Oct 6 2022

Squirrel mortgage advisers love nothing more than when our clients get their happily ever after, especially when it’s been a rollercoaster ride to get there. And clients Charlie and Kyle are no exception. We sat down with Charlie to talk about their journey to first-home ownership – the hurdles, the pitfalls, and how they lived to tell the tale.

Back at the start of 2022, Charlie and her partner, Kyle, hadn’t given a hell of a lot of thought to starting their home buying journey.

They’d decided that getting on the property ladder was something they’d look at in a few years’ time, once they’d had the chance to save a bit more on top of their KiwiSaver.

For now, with a toddler keeping them on their toes and another wee one about to make his entrance into the world, the focus was very much on growing and raising a family.

Then one of Kyle’s workmates approached them with an opportunity. He was selling a property and was really keen to see it go to a young family as their first home, so was happy to cut them a good deal as long as they were willing to take it on as is.

So, they went to check it out.

“The house was in a complete state of renovation. There was no physical kitchen, other than an oven and a basin. I was 8 weeks out from giving birth, and just walking around going ‘What the hell? Why are we even looking at this?’,” says Charlie.

But it was also just around the corner from where they were living at the time (making it super handy to their older son’s kindy), had an awesome front and back yard, and a bunch of space for the family to grow into.

And they knew it was a lot more house than they’d otherwise get within that sort of price range in Auckland, where most of what was in budget was terraced townhouses.

With one boy already, and another on the way, I just knew that if I tried to confine them to a townhouse, I was eventually going to have some smashed windows on my hands,” says Charlie.

“So, my partner was like let’s just get in touch with some people. We’ve got KiwiSaver. Let’s have a look and see if it’s possible.”

Charlie had heard of Squirrel before – and after a quick Google (and sending in a call-back request) jumped on a call with one of our Auckland-based team, Adam, to work out what was do-able.

There were a few nerves, but eventually pre-approval was locked in.

Once they’d filled in all the forms and applications, it was off to the bank.

There was a bit of back and forth needed to get everything in shape – working with a low deposit (10 per cent, from a combination of KiwiSaver and savings), and with Charlie just a few weeks out from heading off on mat leave.

But with Adam to guide them through tighter LVR restrictions, and diabolical CCCFA law changes which were still wreaking havoc at the time, one bank eventually gave Charlie and Kyle their “yes”.

The next challenge was getting the registered valuation done – a requirement of the private sale, and because they were low-deposit borrowers.

“Honestly, at that point it was just about trying to figure out how the place was going to be considered liveable,” says Charlie.

It was with the valuation that things hit a bit of a snag.

The day their valuer rocked up was pretty bleak, even by Auckland standards. But despite the gloomy backdrop, the update he gave Charlie afterwards seemed to suggest things would move forward okay.

“We knew it was in a DIY situation, but he said, you know ‘It’s all good. It is an old house, but you guys are young, and you’ll be able to work on it’.

“Then the report goes to the bank, and they were nitpicking specific words within it. I think it was “poor” – which Adam basically came back and said was the worst word that could possibly have been used. It was completely at odds with what I’d heard the valuer say on the phone,” says Charlie.

The bank weren’t stoked about the state of the lawns either, or the DIY rubbish out front from work the existing owners had already done.

“So, basically, they said they’d give us the money, but we had to choose a different house.”

Looking elsewhere was an option, but not one Charlie and Kyle were super keen on.

They’d only started down this road because of this unique opportunity that’d come up – the space and location ideal for their wee family – and having come this far, were pretty emotionally invested.

“Adam was great. He really understood that from our perspective, so he said ‘Look, let me go chat to [Squirrel founder] JB. He’s dealt with a situation that was somewhat similar, let’s see if there’s anything we can do’,” says Charlie.

“And [Adam and JB] met, and talked, and came back with a list of improvements for us to make to the property, so we could try and run it past the bank again.”

(By this point, it’s worth noting that Charlie was just four weeks out from giving birth. Meanwhile, her partner would be taking on all the improvements himself, after work and on weekends.)

Already a few thousand deep, Charlie and Kyle had to decide whether to cut their losses, or take a leap of faith, trust in the advice they’d been given, and make the changes to the best of their ability. 

“So, we went through the list and said, ‘We’re willing to do X, Y and Z’, knowing, obviously, that we could pretty much just be getting it ready for the existing owner to sell to someone else,” says Charlie.

Some serious DIY, and a new arrival later…

After investing in new kitchen appliances, ripping up old vinyl, tidying up the walls, clearing the DIY rubbish, mowing the lawns, clearing some of the garden, getting power to the house so they could give it a good waterblast – and welcoming a new baby – it was time to get the valuer in again.

“He was really surprised that it hadn’t passed the line first time around, and worked closely with Adam to figure out how they could best approach the valuation from there, before sending it back off to the bank. After that, we were just waiting,” says Charlie.

“I remember being at the mall with my three-year old. It was his birthday, so we were getting him some Paw Patrol gumboots.

Then Adam texts me saying ‘I don’t want to call you right now in case you’re asleep with the baby, but it’s finally gone unconditional’. And then there I was basically just sitting there in the mall, crying.

For the next eight weeks, Kyle spent every waking minute (when he wasn’t at work) at the house – getting it repainted, reskimmed, kitchen installed, plumbing and lighting done, flooring in and curtains hung – getting it ready for the family, until finally they moved in the day they settled.

Charlie’s take on using a Squirrel mortgage broker.

“From our perspective, being first home buyers, there were lots of moments where it was just like “amateur alert” – wondering what does this mean? Where are we at? How do we fix this?

“At some points it was a little frustrating, because we were all just trying to figure out what was going to get through.

“But Adam was extremely supportive, great to get hold of, really quick response times. He knew everything that was going on in our lives – and with two kids himself, really understood – and always did his best to try to find us a solution.

“When we got to talking about mortgage repayments, I had this kind of freak-out moment around finances, just like ‘how is this possible?’. I’m a spreadsheet person, so he got me to send him my spreadsheet, and went through it all again to give me peace of mind that we hadn’t missed anything.

“He was really forward-thinking in terms of when I go back to work, factoring in childcare for our youngest, and just making sure everything was covered in terms of insurance expenses and all that.

“He talked us through the whole interest rate process – obviously mortgage rates are insane, so just giving us insight into where the market could go, and what happens if things go either way. He was constantly in contact – just checking in on how things were going, how we were doing, whether the paperwork had been settled with the lawyers.

“I’d say it’s definitely the simplest way to go.”

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The opinions expressed in this article should not be taken as financial advice, or a recommendation of any financial product. Squirrel shall not be liable or responsible for any information, omissions, or errors present. Any commentary provided are the personal views of the author and are not necessarily representative of the views and opinions of Squirrel. We recommend seeking professional investment and/or mortgage advice before taking any action.

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