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Preparing to Apply for a Home Loan

Purchasing a home is a monumental milestone, often accompanied by one of life’s biggest financial commitments: a home loan. If you’re planning to apply for a mortgage, taking time to prepare can help streamline the process, improve your chances of approval, and even save you money. Here’s a step-by-step guide to help you prepare.1. Understand Your Financial SituationBefore you apply for a home loan, it’s essential to take a deep dive into your financial health. Here’s what to consider:...

New rules for landlords

Important Update on Tenancy Legislation Changes New legislation heading to Parliament this month will bring significant changes for landlords and tenants: Reintroduction of 90-Day "No Cause" Terminations: Landlords will be allowed to end periodic tenancies without providing a reason. Flexibility for Fixed-Term Tenancies: Landlords can also end fixed-term tenancies at their conclusion without a specific reason. Shortened Notice Periods:1. Notice for landlords to move into their properties or to h...

Navigating high interest rates: Strategies for managing your mortgage

Many homeowners are grappling with the burden of high interest rates on their mortgages and while it may seem daunting, there are proactive steps you can take to manage this financial challenge effectively. Strategies for managing high interest rates on your mortgage: Moving to interest only for a period can reduce the cost and help manage the family     budget. Some banks have reduced the hurdles to approve this and will help make this transition easy. This will add fur...

Some banks will lend you more - don't miss out

When it comes to home loans, not all banks view your position the same.They all view and assess your application in different ways.Things like self-employed income, bonuses or rental income may be treated differently which can affect the amount you can borrow.These tools and calculations differ across all banks.For example, let's take the stress test.If one bank has a stress test rate of 8.5% and another has a stress test rate of 8.95% then you may have a better chance at the bank with the lower...

Don't just let your loan rollover

5 big reasons why you need to stop, think and talk to your adviser.New Zealanders and our cousins in Australia are unique. We absolutely love property! We dream big! Upsizing the family home, buying the perfect beach cottage or starting the property investment portfolio is always close to our hearts.The other thing that’s unique to Kiwis is that we see the family home as an investment. So much so that we have a habit of using our retirement savings from the first years of our KiwiSaver contrib...

Banks are taking longer to respond to applications for finance

Navigating Bank Turnaround Times in New Zealand Property MarketIn recent times, prospective homebuyers in New Zealand have encountered delays in bank decision-making processes, affecting the timeliness of mortgage approvals and transactions. These delays have been influenced by various factors, prompting stakeholders to advise potential buyers to initiate their mortgage applications early when pursuing a property of interest.Factors Affecting Turnaround TimesSeveral factors contribute to the ext...

Help for First Home Buyers

Boost for First Home Buyers: Increased Support for Low Deposit PurchasesIn a positive development for aspiring homeowners across New Zealand, the government has announced an expansion in support for first home buyers seeking mortgages with less than a 20% deposit. Currently, lenders are permitted to allocate 15% of their total lending to this group. However, effective immediately, this allocation will increase to 20%. This policy adjustment is poised to make homeownership more accessible for man...

LVR Changes - what does that mean for a property investor?

New Zealand Adjusts LVR Requirements: Implications for Property InvestorsIn a move aimed at balancing market dynamics and stimulating investment activity, New Zealand's Reserve Bank has announced changes to Loan-to-Value Ratio (LVR) requirements for property investors. Effective immediately, investors will now need a smaller deposit of 30% instead of the previous 35% to secure mortgage financing. This adjustment marks a significant shift in regulatory policy that is expected to impact both inves...

Bright Line Test Changes

Brightline Test Reduction: What It Means for Property InvestorsIn a move aimed at stimulating the property market and addressing housing affordability concerns, New Zealand has announced a reduction in the Brightline Test period from 5 years back to 2 years, effective from 1st July 2024. This decision marks a significant policy shift that is expected to impact property investors and the broader housing landscape in the country.Understanding the Brightline TestThe Brightline Test is a tax rule th...

Removal of First Home Buyers Grant

Impact of the Removal of First Home Buyer Grants in New ZealandIn a move that has sparked debates across the housing market and among prospective homeowners, New Zealand has decided to remove First Home Buyer (FHB) grants. These grants, which were aimed at helping first-time buyers enter the property market by providing financial assistance, have been a cornerstone of government policy for several years. The decision to eliminate them marks a significant shift in housing affordability strategies...

Debt to Income Ratios introduced

In a significant move aimed at stabilizing the housing market and managing financial risks, the Reserve Bank of New Zealand has announced the introduction of Debt-to-Income (DTI) ratios for mortgage lending. This new policy sets limits on how much individuals can borrow based on their income, affecting both owner-occupiers and property investors.Understanding Debt-to-Income RatiosDebt-to-Income ratios are a financial metric used by lenders to assess a borrower's ability to manage their debt repa...

Kiwisaver Contribution - impact of lifting contribution rates

Increasing KiwiSaver Default Contribution Could Boost Retirement Savings by $100kProposed changes to KiwiSaver, including raising the default contribution rate from 3 percent to 4 percent, could significantly enhance retirement savings for New Zealanders. According to Retirement Commissioner Jane Wrightson, this adjustment, matched by employers, might add up to $100,000 to the accounts of median-income earners by the time they retire.KiwiSaver balances across all age groups are currently lower t...

Worried about your mortgage being up for renewal? What are your options?

A recent banking survey by Horizon indicated there is a lot of pressure already on home owners with more to come.Around 3% of New Zealand mortgage holders are fearful they may have to sell a property over the next year – that’s equivalent to 43,000 home loans.In addition the study showed 51% of mortgages are due to renew and will roll over to the higher interest rates. The study showed almost one-in-three borrowers on fixed rates will see reviews between June and October this year, with 51% ...

Mortgage Rates Still Climbing in NZ

Mortgage rates may edge up further in the months ahead but economists and mortgage brokers spoken to by OneRoof don’t expect big hikes from now on.The Reserve Bank signalled in May it would not be lifting the Official Cash Rate further, leading to a premature expectation by homeowners that that was also the end of mortgage rate rises.Since the May hiatus major banks have continued to put mortgage rates up, some more than once. The OCR, however, is not the only factor in banks’ decisions...

Set yourself up for success when buying your First Home

Focus on the facts. Tens of thousands enter the property market each year in New Zealand and you can too.Once you’ve set the goal you need to make sure your finances are as healthy as they can be.Reduce any debt you may have and to do this you need a plan.Systematically work your way through any debts and minimise them if possible.A good approach is to focus first on debts with the highest borrowing costs.Another approach is debt consolidation to reduce the overall interest you are paying and ...

Mortgage Pressure - You're Not Alone

See the full interview HERE...

Is your bank no longer wanting your business?

In a shock announcement for HSBC mortgage holders, HSBC has announced that it will be exiting the New Zealand market.HSBC actively marketed itself as a bank offering discounted rates to what they determined to be “premium clients” attracting people with good incomes and strong deposits. If that is you, I expect you are not feeling treated like a premium customer right now.Many of our clients fit this profile and are high earning professionals who would rather have a personal touch and someon...

Managing your mortgage: A Guide to Mortgage Refinancing

Buying a home is a significant investment that comes with various expenses, including mortgage payments. While paying off a mortgage over a long period can be daunting, refinancing your mortgage can be a useful tool to reduce your monthly payments and maximise your savings.Refinancing your mortgage involves replacing your current mortgage with a new one that has better terms, such as lower interest rates and more extended repayment periods. This process can help you manage the repayments within ...

What impact does insurance have on buying a home?

Although a property may look great on the surface, there can be a number of reasons where it is usually uninsurable and this means that you cannot get finance from a bank.Reasons include:Unconsented workOlder homes with wiring that needs to be testedLeaky homesProperties in flood zonesCoastal or cliff-top propertiesThe home has been subject to an Earthquake Commission (EQC) claimWe sometimes come across situations where the vendor takes the house to auction, not realising the banks require full...

Changes to LVR restrictions

Since November 2021 many creditworthy borrowers have been blocked from obtaining finance by the LVR limits that were put in place due to the pandemic to reduce the risk to banks.Restrictions on high-LVR residential mortgage lending set a ‘speed limit’ on how much new low-deposit lending banks can do. A loan-to-value ratio (LVR) is a measure of how much a bank lends against mortgaged property, compared to the value of that property.The Reserve Bank has just confirmed new LVR limits that will ...

Once in a generation opportunity to buy (He said it not me!)

I recently had the chance to listen to economist Tony Alexander speak at the Financial Services Council Conference. Although many in the Media see the current market conditions negatively, Tony instead sees them as a once in a generation opportunity to buy property that historically would have been out of reach.Here are his reasons why now is the time to buy.1.     Migration is increasing at rates we have not seen for over 3 years. With the government relaxing migration red t...

Move to your own home not any home, when relocating to New Zealand

Whether you’re a new resident to New Zealand or an ex-pat returning to our shores, a big part of your relocation is establishing a new home. For many, renting may seem the easy option.The New Zealand property purchase process is very different to, the UK and USA and may seem confusing. But what if you had a coach in your corner with a clear path and a plan? What if you had an experienced financial adviser who used to work for the biggest NZ bank, knows not only what you need to do, but how to ...

My Money December Newsletter

And it is certainly time for a break. I would like to say a huge thanks to all our clients, our preferred partners and support people for helping us thrive this year.Please note that we will be closed for the holidays from 24th December 2021 and re-open on 10th January 2022. For any urgent support during this time, please contact Stephen directly on 027 5408 900...

The process for obtaining a mortgage

This flowchart explains the process and the way I can help. It has become considerably more involved than it ever was before. The left side shows the steps and the right side where I fit in. Thought it might be of interest to you....

My Money October Newsletter

This week the Reserve Bank has lifted the Official Cash Rate(OCR)to 0.50 per cent. This was expected, and as they were poised to do back in August before the Level 4 lockdown was announced.Madison Reidy from Newshub called up and wanted an interviewon the impact of the change for first home buyers so it was outsidefor a conversation despite no haircut for 7 weeks!In our last newsletter, we touched on the changes that were coming, and already the impact is being felt. What the changes will i...