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Mortgage Broker Christchurch - Property Gazette - May

Wed, 23 May 2012 06:40:00 GMT

AMS Property Gazette - May

I would like to start May’s Property Gazette by saying thank you to all those who visited our new Facebook page and clicked the like button. Your participation is most welcome.

If you missed this opportunity last month and would like to have a look please click here to be automatically taken to the Advanced Mortgage Solutions welcome page.

Now on with what’s happened this month.

Current Interest Rates as at 1 May 2012

Variable               5.50%
6 Month Fixed     5.40%
1 Year Fixed        5.40%
2 Year Fixed        5.55%
3 Year Fixed        5.85%
5 Year Fixed        6.65%

Interest Rate Outlook

There’s a more positive vibe in the market as the new financial year gets underway. The increase in general business and housing activity (which was widely predicted to occur in 2011) is now starting to appear.

This is being supported by good demand and prices for residential properties in the larger cities of New Zealand. The continuing population increase of Auckland, and the Christchurch earthquake rebuild mean that these 2 cities are leading the charge. The increase in house prices should start a flow on effect to other sectors in New Zealand.

This demand is now starting to push up an increase in both residential property rents and values. These increases are driven purely by supply and demand. The shortage of houses being built (coupled with the perception that prices are rising), is creating strong demand in the market, even while economists are quoting various housing unaffordability statistics.
We have seen residential property values rise 3.0% across the country over the last year and are now just 3.0% off their 2007 highs. Auckland has led the charge, up 5.0%, followed by Christchurch at 4.1%, and Whangarei at 3.1%.

Mortgage rates have not changed and have held steady since the last round of reductions in mid-February. The mortgage curve has been very “ﬂat” out to 2 years. We still believe the Reserve Bank will move rates up late in 2012 or early in 2013, this would suggest that it might be worth ﬁxing for 2 or 3 years, particularly as longer term fixed interest rates can go up without a change to the official cash rate.

Now is a great time to look into your options. Please feel free to email me by clicking here or contacting me on 0508 466 356 to talk through what’s best for you.

What’s Hot

The market!
Money has never being so cheap and banks are fighting over each other for business. We have seen an increase in lending every month this year and feel that it is set to continue.

Deal of the Month

Consolidating debt can be a great way to reduce your monthly commitments and get back on top of your cash flow. Last month we refinanced a client’s debts, putting together the mortgage, car loan & 2 credit cards which were costing $1,880.00 per month into one loan @ 5.50%, reducing the payments by 690.00 per month to $1,190.00 per month - call us we deliver!

Property Gazette - April

Wed, 23 May 2012 06:38:00 GMT

Client News - April 2012

Welcome to April’s Property Gazette.

This month has seen the completion of Advanced Mortgage Solutions Facebook page. Feel free to have a look around our page by clicking here – please remember to push the “like” button as this helps us get found!

Interest Rate Outlook

We could be excused from feeling like it is a case of “last one out turn out the lights” with the outflow of migration being the highest it has been in NZ since 2001. Yes, there is an outpouring to the perceived ‘lucky country’ in Australia, with some 38,000 leaving our shores last year, however this is offset somewhat by the inflow of 35,000 from other parts of the world, creating only a slight migration deficit - which is nowhere as bad as it may appear.

The outflow of Kiwis to Australia is certainly contributing to the stalling of our economy but the reality is nowhere near as bad as the perception. Of course, one of the things that our Kiwi cousins need to consider is the higher cost of property and living on the other side of the ditch, and while employment opportunities may be more plentiful the cost of getting into property can offset this benefit.

So we have immigration working against us and there is still a focus from Kiwis on deleveraging their balance sheet (or in layman’s terms repaying debt before entering into new purchases) which together with a continued lack of housing stock attributes to holding our growth back.

However, the stock that is hitting the Real Estate market is certainly moving quickly, particularly in Auckland and Christchurch, where average days to sell in both areas is now under 30, which is the lowest in over 2 years.

In relation to interest rates, we continue to enjoy historic lows which are helping with mortgage affordability. There is currently little to no difference between floating and 2 year fixed money and it is only if clients look to fix for longer than 2 years that there is an increase in interest rates carrying a small cost for the extra certainty of a long term fixed rate.

So what to do? It really depends on your personal circumstances, however we do see great value in being able to lock in low-to-mid 5% rates for 2 to 3 years. The only caveat is that you need to be 100% certain that you are not looking to sell your house or make large lump sum principal reductions during the fixed period.

Please contact me to go over your personal circumstances as interest rates have never been lower and are not likely to become lower than they are today.

Authorised v Registered

You may be aware that the financial services industry is now regulated - which is a great thing for you the consumer as it is all about protecting your rights.

There are two categories of Advisers, Authorised & Registered. Essentially, the main difference between the two is that only Authorised Advisers can give you advice in relation to Investment products while both Authorised & Registered Advisers can provide advice in the areas of Mortgages, debt and Insurance.

The most important thing to know is I am fully registered with the Government, (it is illegal to operate and not be registered). To check this out just go to www.fspr.org.nz and type in Scott Miller. This will quickly confirm that I am able to approach New Zealand lenders on your behalf.

Reduce Payments or Keep Them the Same?

This message is definitely getting through, and more and more of our clients now enlist us to negotiate with their bank on expiry of their fixed interest rate. It is part of our on-going service and costs you absolutely nothing - in fact, the opposite applies in that we are able to negotiate the very best rate for you from your bank.

A question asked of us regularly when a client’s interest rate reduces is “should I reduce my payments or keep them the same?” If you can afford to keep them the same this is definitely a wise thing to do. Let’s look at a simple example to illustrate this.

We have a client with a $200,000.00 mortgage over a 30 year term currently on an interest rate of 6.50%, paying $1264.00 per month. If this rate expires today it is safe to assume we could re-fix in for at least 5.50%. This could drop the payments to $1135.00 per month -or if we kept the payments the same at $1264.00 this would reduce the term from 30 years to just over 24 years and save $51,921.00 in interest – not a bad option for most of us!

As mentioned above please contact me while interest rates are low.

Does a Line of Credit Work?

We are often asked by our clients whether a line of credit loan is a good option for them with their mortgage. Of course the answer is that it does depend on your own set of circumstances.

The main benefit of using a line of credit is that it allows you to run your income through your mortgage (while not losing access to the funds) and because banks calculate interest on a daily balance, any time funds offset your mortgage balance (as an example in the form of your wages) it will save you interest.

Often, the better option is to have only a portion of your mortgage on line of credit, with the balance on a standard principal & interest loan. This provides the flexibility many clients want, the benefit of being able to run your income through your loan, and the ability to enjoy the very sharp fixed rates that are currently available for principal & interest loans.

You are best to talk to me to understand the benefits of a line of credit and whether or not this option is best for your own circumstances.

Property Gazette - March

Wed, 04 Apr 2012 04:25:00 GMT

Current Interest Rates as at 1 March 2012

Variable                   5.60%
6 Month Fixed          5.40%
1 Year Fixed            5.45%
2 Year Fixed            5.49%
3 Year Fixed            5.85%
5 Year Fixed            6.65%

Interest Rate Outlook

As mortgage interest rates remain low they continue to provide fuel to the property
market. January house sales volumes lifted for the third successive month, with strong sale prices offset by an on-going lack of available houses on the market. This shortage is continuing to drive prices up.

Tempering the growth is the unstable employment market and continuing desire of households to pay down debt. These factors together with the uncertainty created by overseas economies will help damper a major boom in the property market, however overall it is predicted house price will continue to increase albeit at a slower steady rate. The possible exception to this is Christchurch where house and rent prices are rapidly increasing.

While the Reserve Bank do acknowledge that the property market is showing healthy signs of recovery they still have their focus centred on the European debt crisis, and all the noise coming from the Reserve Bank indicates that any interest rate movements to our OCR will not occur until the back half of this year. There are however some extremely low fixed interest rates available now that cannot be ignored. I believe for some people now is a great time to look at options – please read on for more information.

Mortgage rates eased further last month especially in the longer term 3 – 5 year fixed rates. Although this has made it cheaper to fix for 3, 4 and 5 year terms, these rates are still relatively slightly higher than the current shorter term rates. Similar to last month there is very little difference between floating rates and 1 – 2 year fixed rates - as such we still believe that the best options currently in the market are to either float, look to fix for 2 years or take a combination of both, splitting your debt.

Please contact me for a free assessment of weather these low interest rates are something that would help lower your mortgage costs in the short and long term – there are some real savings to be made at the moment.

What’s Hot

Free Money – get it now! The banks are currently running some crazy incentives with some giving away as much as $1,000.00 as an enticement for clients to take their mortgage with them. You will be surprised by the attractiveness of what we can get for you - Refer your clients now!

Deal of the Month

Last month’s client was a NZ citizen working as a “Miner” in Australia. He was trying to buy a home to live in and was using some equity in an existing block of land. After being frustrated through other sources he found his way to us and we got him sorted - call us we deliver!

Interviewed by The Advisor - Emily Mclean

Wed, 04 Apr 2012 04:26:00 GMT

From shaky grounds to solid rewards

Since enduring a devastating earthquake a little over a year ago, the Christchurch property market has been on shaky ground. As thousands of residents have sought to evacuate the city and properties have been deemed un-liveable, mortgage brokers have been forced to find new and opportune ways in which to market their businesses.

Since the disaster social media has been become a crucial tool in marketing. Whilst businesses were forced to move locations an online site provided an unmovable medium. This allowed brokers a direct link to their customers whilst their physical location was in the midst of chaos and relocation.

Director of Advanced Mortgage Solutions, Scott Vaughn Miller, said moving into the social media industry was hugely beneficial. “I used a bit of everything, Facebook, Twitter, and linked-in as well as my own website. At least fifty percent of the referrals I have now come from clients seeing me online”. As a result of this, Miller’s business has now increased to the point where he is taking on new staff and referring work to other brokers.

Director of Bev Dickey Mortgages, Bev Dickey, agrees with Miller. She said her website has been invaluable over the last year. “I am reaping the rewards of a great website. This is because it’s approachable with no babble and has the right colours and layout. My advice to any broker is to get a great web designer.”

The great saying ‘think globally, act locally’, has re-emerged following the quake. Mortgage brokers are realising the power that a community can generate and brokers such as Miller and Dickey are using this to their advantage.

“Advertising locally and being a visible part of the local community means clients feel one step closer to their broker…it’s therefore easier to quickly gain that level of trust that’s vital” said Dickey. She reinforces that gaining trust as a broker is crucial as people then feel comfortable opening up about their whole financial situation.

According to Miller though, gaining a step up on the local competition comes down to referrals from pre-warmed leads. “I approached lawyers and accountants who already had a large sphere of influence over the local community. They were therefore able to refer large numbers of their trusted clients to me”.

While Christchurch residents are ‘keeping on keeping on’, so are the mortgage brokers. “Keep on persisting is the best piece of advice I would give any broker seeking to expand their business” said Miller.

Dickey encourages every broker to take a good look at what is and what isn’t working for them. “If it’s not working for you then change it” she said.

In the midst of a city in constant turmoil, persistence and a willingness to change is something these two brokers have had to take on board in increasing measure - but their businesses are reaping the rewards.

Emily Mclean - The Adviser

Property Gazette - February

Wed, 04 Apr 2012 04:27:00 GMT

Welcome to February's edition of AMS's Property Gazette.

I would like to start by announcing the Advanced Mortgage Solutions has moved! We have now opened an office at 6 Burdale Street, Riccarton Christchurch.

Please click here to see our new address on Google Maps.

The process of finding an office has been a while in the making as the recent earthquakes in Christchurch made it harder to find suitable office space. Please feel free to drop by if you are in the area - I would love to show you around.

What's happening in February?

Current interest Rates as at 1 February 2012

Variable               5.60%
6 Month Fixed         5.45%
1 Year Fixed            5.55%
2 Year Fixed            5.65%
3 Year Fixed            6.10%
5 Year Fixed            6.90%

Interest Rate Outlook

It would appear that 2012 has kicked off with some continued momentum from late last year as have noticed a broadening trend of being a lot busier over the last 4-5 months.

December continued on the strong trend of November in house sales, with consecutive strong months seeing increases in sales of circa 5% each month. It would appear the extended period of historic low interest rates is finally starting to push some confidence across to property purchases. This, together with the nation waking from its rugby world cup hangover, is driving the strongest level of activity we have seen for a couple of years now.

The Real Estate market is still being held back though by a genuine lack of quality stock across the country (with a particular emphasis in Christchurch) and this is seeing the average days to sell a house drop (now down to 39 days). We believe this will continue to ease further over coming months, giving the market some momentum.

Approximately 60% of Kiwis are currently sitting on a variable rate mortgage, which gives the Reserve Bank great confidence that they can actually influence consumer behaviour with interest rate movements if and when they have to. That said, they have signalled that they do not expect to have to push interest rates up until the 2nd half of this year.

As the 1 & 2 year rates fell in the latter part of 2011, we now see this flattening from the variable rate through to the 2 year fixed rate. As such there is little to no difference between the current variable and 2 year fixed rates. Given that we anticipate small increase in variable money later this year, the current 2 year fixed rate holds appeal for us as a sound borrowing strategy - or for the slightly more adventurous splitting the funding into 2 accounts of part 2 year fixed and part variable will ensure not missing out on any variable rate discounts if they were to come on offer. All in all, quite an attractive time to borrow money!

What's Hot

2012 has kicked off right where 2011 finished. Competition is hot among the banks for business and right now the rate they are all sharpening is the 2 year fixed. We are seeing cases of 2 year rates being offered as low as 5.49% - that is cheap money! Refer your clients now!

Deal of the Month

Last month we helped a more unusual client request, coming from a 70 year old gent buying a modern retirement unit. He was short of the full purchase price and we were able to fund him on an equity release loan for the shortfall, not requiring any monthly payments - call us we deliver!

Property Gazette - December

Wed, 04 Apr 2012 04:29:00 GMT

Welcome to December's edition of AMS's Property Gazette.

Well here we are at the end of another year, and what a year it has been. Earthquakes, mine explosions, rowing world champs, rugby world cup, shipwrecks, and a general election make up an extreme year of highs and lows.

On a personal note I would like to say thank you to all those who have helped and supported the Canterbury earthquake appeals, without your help many of us Cantabrians would be in a far worse position than we find ourselves.

On a brighter note New Zealand finds itself in the middle of a mini pricing war between the mainstream lenders which is bringing all sorts of goodies for us consumers – please feel free to contact me to find out how you can benefit.

So onto the economic news in New Zealand and around the world.

Current Interest Rates as at 5 December 2011

Variable                5.60%

6 Month Fixed        5.59%

1 Year Fixed           5.55%

2 Year Fixed           5.65%

3 Year Fixed           5.95%

5 Year Fixed           6.95%

Interest Rate Outlook

Don’t turn on the news if you want any light relief – even though we got through the election rather painlessly we are still subjected to painful scenes every night. Most of which come from overseas and it is not uncommon to see 3 or more clips of rioting or fighting amongst citizens of the same country.

The financial stress that the world economy is under adds fuel to simmering tensions that run through many countries and right now every day it appears that Europe gets worse, as economic instability spreads from Greece, though Italy, France and even on to the previous impregnable Germany. It is at times like this that the tyranny of distance can be our friend, although while we are removed from the violence we see, we are not removed from the economic pressure the bad debt crisis in Europe is generating.

Fortunately for us all, this pressure has currently resulted in an easing of long term fixed rates and for the first time in some months we saw a reduction of interest rates in the 2 & 3 year fixed periods. How long this will last or whether it will continue is too difficult to know, however it now sees Variable and Fixed Interest rates closer than they have been for some time.

As such, the question that is now common, is should I fix my rates now? There is no right or wrong answer to this question although with 2 year fixed rates now matching variable there is no longer a dollar cost in buying some stability. It is just some flexibility that clients will forgo by locking in now.

The question of will interest rates go even lower is also a hard one to answer, while we are at historic low rates there is no guarantee that if the above European issues worsen that we will not see further interest rate cuts across the world. Given there is so much uncertainty perhaps the best strategy could be splitting your loan into part variable and part fixed at a mid-term rate.

What’s Hot

It is the season to be silly and the banks are obliging with some crazy deals in the market right now. We are seeing big interest rate discounts off already sharp rates and legal fee contributions exceeding $1,000.00 regularly, talk to us, you will be surprised what we can get from your bank.

Deal of the Month

We’ve seen it before, clients with a history of excellent credit and all of a sudden an event occurs in their life, it may the death of a loved one or business venture failed, all of a sudden their credit is shot – last month we helped a client in this position to secure a home - call us we deliver!

Property Gazette - November

Wed, 04 Apr 2012 04:30:00 GMT

Welcome to November's edition of AMS's Property Gazette.

So the Rugby World Cup has been won by the All Blacks! Congratulations New Zealand and congratulations the All Blacks, what a wonderful display you put on for us. I don’t know about you but that was one of the most nerve raking games I have ever watched. However a 1 point win is as good as a 20 point win once the final whistle is blown.

It has been widely reported that New Zealand put on a fantastic show and that once again we have been pushed into the world’s spotlight. I believe the benefits of hosting the Rugby World Cup will filter through to our economy for many years to come.

So onto the economic news in New Zealand and around the world.

Current Interest Rates as at 1 November 2011

Variable             5.60%
6 Month Fixed        5.59%
1 Year Fixed           5.59%
2 Year Fixed           5.89%
3 Year Fixed           6.45%
5 Year Fixed           7.25%

Interest Rate Outlook

The world, in economic terms has been doing it tuff now for several years. To once again see more prosperous times, it’s going to take the sum of many moving parts working together to make a difference. There are still those variables we cannot control, (think Referees here) such as the state of the European & American economies, which unfortunately our banks still have to approach for their off-shore funding. We will always be susceptible to their financial stability but more and more New Zealand lenders are trying to limit the amount they need to borrow from offshore, (similar to taking the referees decisions out of the game).

Internally, our economic engine continues to be our rural sector and while commodity prices have come back somewhat the market is still strong. The rural surge is timed nicely with the historically low interest rates allowing farmers to reduce debt, freeing up some internal bank capital. Our beautiful country is also set for a tourism boom on the back of what the world has just seen and this should assist the retail sector continue their strong year on the back of RWC.

So there appears to be money flowing in our economy, we just need to ensure this is best utilised, not unlike the farmers, reduction of debt should possibly be many individual’s focus.

Sustained low interest rates are also helping the housing sector as we see the average days to sell houses continue to drop and many examples of multiple offers being placed properties, a momentum we believe will carry through the traditionally buoyant summer months.

As for a current borrowing strategy, variable rates look set to remain at current levels through until mid-2012, accordingly, the floating rate looks the best option right now, although 1 year & 18 month rates are practically the same and provide some nice stability of payment. For those prepared to pay a small margin of 0.25% - 0.50% you can now lock in for 2 years.

What’s Hot

The annual Spring race for asset growth is on seeing the banks all coming out with some weird & wonderful incentives to convince consumers that they are the best option. The most innovative being a replica RWC if you take a mortgage (and yes we have access).

Deal of the Month

Equity solves most problems for banks, last month we funded a lady into a house whereby she had only been in her start up business for 4 months, however with 50% deposit we were able to structure the deal by putting 1 years payments aside and securing the house - call us we deliver!

Property Gazette - October

Mon, 03 Oct 2011 21:09:00 GMT

Welcome to October's edition of AMS's Property Gazette.

The Rugby World Cup is up and running and although Dan Carter is now out for the rest of the tournament, I think we have a great chance at winning the competition. Despite this distraction real world events keep on moving. Please read on for the latest interest rate and property information.

Current Interest Rates as at 3rd September 2011

Variable                 5.60%

6 Month Fixed         5.60%

1 Year Fixed           5.75%

2 Year Fixed           6.20%

3 Year Fixed           6.70%

5 Year Fixed           7.40%

Interest Rate Outlook

Occasionally distance can be your friend, and being a little isolated and removed from the debt crisis fallout in Europe is certainly a good thing at this moment.

However while activities in these larger markets do have an impact on our funding cost, the severity of their impact is lessened. Nonetheless, the financial mess that is Europe is likely to see New Zealand’s Official Cash Rate held at its current low level until first quarter of 2012.

Locally, while the property market remains flat it is being readied for a strong 2012 on the back of the Christchurch rebuild and we are already starting to see positive signs in the Auckland market with well-priced houses moving quickly.

Of course we are half way through one of the strongest economic spending booms New Zealand has seen over the last 5 years thanks to the Rugby World Cup. But this spending is fleeting relief at best, and is seen as a temporary good-time blip; however it does clearly add fuel to our positive growth.

With the developing events in Europe one could argue that remaining on the floating interest rate is a good thing. I agree to a point, but only to a point. We have seen massive swings in financial markets recently, with large losses and gains happening almost daily.

However, the above strategy does come with a caveat. You need to keep your eyes and ears open for when interest rates do start to move. New Zealand is experiencing record lows in regards to interest rates and at some point it will be wise to lock in a fixed term before we see sharp rises in interest rates.

What’s Hot

There is only heat on one thing at the moment, the mighty All Blacks, even non rugby followers cannot help but be caught up in the hype that is RWC, and haven’t we as a country done ourselves proud, it is great to see how we have embraced the tournament – Go The AB’s!

Deal of the Month

Last month I had a client who had a black marks on their credit check & had been told ‘No’ by a number of banks, I managed to paint a clear picture of the circumstances for the bank and had her approved before long, saving a house sale for our referring agent - call us we deliver!

Property Gazette - September

Tue, 06 Sep 2011 07:47:00 GMT

Welcome to September's edition of AMS's Property Gazette. The big talk around town for the last month or so has all been about interest rates. What are they going to do.....go up.....or go down? Well, with no clear answer interest rates continue to dominate the headlines.

Current Interest Rates as at 5 September 2011

Variable                    5.60%
6 Month Fixed               5.60%
1 Year Fixed                5.70%
2 Year Fixed                6.20%
3 Year Fixed                6.70%
5 Year Fixed                7.40%

Interest Rate Outlook

Predicting what interest rates are going to do is very difficult right now. No sooner does there appear to be the movements of recovery in NZ & demand for fixed interest rates and the next thing the global debt crisis worsens and we all start second guessing each other.

Clearly our friends in the US and Europe are experiencing some difficulties in relation to their debt and funding troubles, and this affects us. Due to our size we fund a good portion of our residential mortgages from international money markets.

As Europe and the US scramble to keep their credit ratings and heads above water the price of purchasing fixed term money remains low and our earlier concern that fixed interest rates could spike has eased. However this easing may be short lived.

Locally, we are still showing signs of recovery with housing consents starting to move upward and the level of mortgage approvals up some 20% on 2010, indicating activity is definitely on the increase. Furthermore as soon as the government can coordinate the overseas reinsurers to provide cover on new houses built in Christchurch, the sooner markets will kick-in. Currently it is this stifling that is slowing the rebuild and recovery in the region.

With so many variables outside of our control, it does not give anyone much confidence to make bold predictions, and while the fixed rate pressure has eased, we still feel the international debt crisis has only delayed the inevitable rate increases. We do not believe we will see rates increase in September now as originally thought and may be pushed out to as far as the end of the year, however as we have seen this can change in an instant.

Put simply if you are of conservative nature, the current sub 6% rates for 1 year or low 6% for 2 years still look appealing, if you are more aggressive and are prepared to keep an eye on the market the current variable rates are still the cheapest option. A more prudent option is to have some of your loan on fixed and some on floating.

What’s Hot

As the above outlines the finance market sure is a fickle place and majority of our clients really are confused as to what the right thing to do is in relation to interest rates right now. The single biggest demand we currently have is for advice on interest rate strategy – call me to work out yours.

Deal of the Month

An active Investor already carrying a sizeable debt fell at our door last month, exhausted by declines from his current financiers. As we had a wider range of options we were able to get $885,000 approved for him funding him into his next project - call us we deliver!

Advanced Mortgage Solutions - Property Gazette - August

Wed, 10 Aug 2011 05:52:00 GMT

Firstly I would like to apologise for this month’s Property Gazette coming to you a little later than normal. There has been a lot going on this month with the United States being down grade to a AA+ credit rating, a lot of talk around the pressures on the Official Cash Rate, and the New Zealand Mortgage Broker Association’s annual conference being held on the 4^th and 5^th of August.

So what has been happening this month?

Current Interest Rates as at 1 August 2011

Variable                       5.75%
6 Month Fixed            5.65%
1 Year Fixed                5.75%
2 Year Fixed                6.20%
3 Year Fixed                6.70%
5 Year Fixed                7.45%

Interest Rate Outlook

Should I stay or should I go now? If I go there could be trouble, if I stay there could be double....

This rock song classic by the Clash sums up consumers’ attitudes toward interest rates at the moment. Should I fix now or should I stay floating?

The consensus of most is that you should fix your interest rates soon (maybe over the next month or so).

But when?

Should you do it now or can you squeeze another month or two out at these basement rates of under 6%?

Personally I am of the opinion of that “it’s better to be safe than sorry”. It is almost impossible to pick the last day of the cheapest floating rate available, but if you look to fix shortly you are guaranteed to fix in a current fixed interest rate that is tipped to go up.

I am able to negotiation with lenders good margins off all fixed interest rates terms at the moment. This won’t last forever as the pressure on rates is to go up, so please consider contacting me when it is convenient.

As the bank economists sat glued to their iPads, iPhones, Blackberries for Reserve Bank Governor Alan Bollard’s address on July 28th, most were left none the wiser as to whether now is the right time to lock in. Dr Bollard certainly has indicated that rates are going to rise this year, although exactly when nobody is sure.

You get the impression he would like to move now but is very concerned about the strength of our currency (or more so the weakness of the US, and now the credit rating drop) and this may be the sole factor in holding rates back to their current level. As such it doesn’t really put us in control of our own destiny when it comes to rates as we are reacting to events in the US & Europe as their debt crisis worsens.

My pick is he may not move in September but is more likely to do so on October 27th (the next OCR announcement) and the move could be as high as 0.50%. Be aware that as the demand for fixed rates increases, so may the price, and I would not be surprised to see fixed interest rates move higher before the variable rate moves.

My advice is to not be too greedy now as it may cost you in the future. It may be worth considering locking in part or all of your mortgage in the next month or so because, let’s face it, interest rates sub 7% locked away for a period of time is a good thing.

What’s Hot

Fixing your interest rate! As many of our customers get nervous they are flocking from variable interest rates into fixed rates. Nobody knows when but at some stage this year rates are going to rise and often it is the fixed rates that move before the variable, so fixing now does make sense.

Deal of the Month

Getting by with a little help from Mum & Dad, last month we 100% funded a young couple into their first home, yes Mum & Dad acted as guarantors but they are only responsible for 20% of the value of the home & the young couple can comfortably afford the debt - Call us we deliver!

Advanced Mortgage Solutions - Property Gazette - July

Mon, 04 Jul 2011 01:07:00 GMT

Current Interest Rates as at 1 July 2011

Variable                      5.40%
6 Month Fixed              5.59%
1 Year Fixed                5.55%
2 Year Fixed                6.20%
3 Year Fixed                6.70%
5 Year Fixed                7.45%

Interest Rate Outlook

You can’t help but think that we might actually be our own worst enemies in slowing the economic recovery. There are so many variables that indicate we are set for strong growth but they have been this way for a while now.

We have a market shortage of quality properties on the market, those that hit the market well priced are snapped up and market rents are rising which will surely start to push people toward buying. We also have a whole new wave of potential buyers hitting market as KiwiSaver matures to a point that allows consumers to withdraw their and their employer’s contributions, as well as qualifying for the government first home buyer’s grant of $1,000.00 per year for every year you have been in the scheme.

So what is holding us back? Confidence or more to the point a lack of it, as a nation we are still sitting on our hands, afraid to spend, afraid to take a step and it is this lack of activity together with a net outflow in terms of migration that is holding our economy back. We just need a little more activity and demand and the market can get some momentum which it sorely needs.

Mortgage approvals are up just over 10% on 2010 so this is a good indicator and as soon as the rural sector actually starts spending their 2^nd consecutive record pay-out as opposed to focussing solely on reducing debt the quicker the economic recovery will kick in.

In relation to our recommended borrowing strategy we hold a similar view to last month, we have no doubt that we will see rate increases in the last quarter of this year and as such feel that the shorter term fixed rates probably offer the best value as there is little differential between variable and 1 year or 18 month fixed rates. For those a little more risk adverse we suggest the 2 year rate still offers good value at less than 1% above current variable rates, as long as you realise you pay a small premium now to buy some security.

What’s Hot
KiwiSaver, it has now reached the stage where consumers who have been in their Kiwi Saver for 3 years can withdraw their and their employers contributions together with a first home buyers grant from the government puts many of these people in a position to buy their first home.

Deal of the Month
Last month we helped a couple with 3 teenage kids restore control to their finances, things had got out of control over the past few years with them racking up 2 credit cards and 2 personal loans, we refinanced it all into one, saving them $500.00 per month - Call us we deliver!

Advanced Mortgage Solutions - Property Gazette - June

Thu, 02 Jun 2011 21:15:00 GMT

Please find June's Property Gazette below. As always I have made comment on relevant market and policy informtion to help you keep up to date. I appreciate the monthly feed back and questions that arise from each newsletter and I'm sure this will be no different.

I would also like to take this opportunity to welcome all those clients who have joined the AMS team from Carolyn Dreaver's ODL Mortgages. Carolyn has decided to leave the mortgage industry and we wish her all the best of luck with her future business ventures.

Current Interest Rates as at 1 June 2011

Variable              5.40%
6 Month Fixed         5.59%
1 Year Fixed          5.55%
2 Year Fixed          6.20%
3 Year Fixed          6.70%
4 Year fixed          7.30%
5 Year Fixed          7.45%

Interest Rate Outlook

You can be excused for missing the release of the biggest ‘no news’ budget in recent history, it just sort of came and went with very little fanfare and the underlying message continued that we have to keep our spending to a minimum both as consumers and from a government perspective with all focus rightly looking forward to the rebuild of Christchurch.

A tight budget means that fiscal policy will keep growth in check for the year ahead which will take some pressure off the Reserve Bank in terms of how high they would need to push interest rates, which is of course a good thing.

House sales figures continued to lift through April & May from their late 2010 trough however still remain around a third below historical averages. Encouragingly though building consents are on the rise with a new motivation arising to ‘get it done now’ before construction sector shortages emerge across the country use to the Christchurch rebuild. This increased activity together with a second successive yearly record payout on the dairy sector should start to give the economy a nice little boost, the reality is farmers will have to start spending or be faced with a sizeable tax bill & we all know how much cockies like paying tax!

All of the above is leading to a pretty positive outlook with confidence quite high in business and investment sectors, this if course leads us to our current recommended borrowing strategy.

With more than 2% variance between long term fixed rates of 5 years it is difficult to see value in longer term rates. However, we have no doubt that we will see rate increases in the last quarter of this year and as such feel that the shorter term fixed rates probably offer the best value as there is little differential between variable and 1 year or 18 month fixed rates. For those a little more risk adverse we suggest the 2 year rate still offers good value @ less than 1% above current variable rates, as long as you realise you pay a small premium now to buy some security.

What’s Hot

Competition really is a beautiful thing and now the Banks credit appetite has returned they are returning to their old tricks of sweetheart deals on interest rates and professional fee contributions. We are seeing some very sharp pricing now as the banks compete for our clients.

Deal of the Month

Last month we funded a gentleman into his first home, he had enquired about using Kiwi Saver as deposit on his home and was very pleasantly surprised to learn that not only could he use his contributions but his employers and qualify for a government subsidy, totalling $20,000.00 he could put toward his first home making it all achievable - Call us we deliver!

Scott Miller - Quoted in the Press Newspaper

Mon, 16 May 2011 01:41:00 GMT

This article was published on the front page of the Press on the 11^th May 2011. I was quoted from the perspective of being the owner of Advanced Mortgage Solutions, a mortgage broking company operating in Christchurch post earthquakes.

Real estate market split by quake

Buyers are shunning homes in eastern Christchurch as the effects of the earthquakes split the housing market.

Sales in the hardest-hit suburbs have slowed to a trickle, with so few recorded that valuation agency QV has been unable to measure trends in values.

In Sumner, Chris Milne can neither sell nor rent his undamaged beachfront apartment.

He bought the property to rent out now and retire in later, but even halving the rent drew no tenants.

The apartment is for sale, with an asking price less than its 2007 rating valuation.

Open homes have drawn a blank.

"Nobody turned up," Milne said. "People are just reluctant to live out this way.

"They seem to be worried about the portaloos, the damaged roads and the traffic jams, but it's certainly no worse here than anywhere else."

He said the Sumner real estate agents had left.

Real estate agent Tim Dunningham, of Min Sarginson, said the market around Lyttelton Harbour had "just gone dead", even as far away as Diamond Harbour and Church Bay.

"We've actually had almost no damage over here, but we are finding there are no buyers and no interest whatever. It's very frustrating," he said.

"People are rushing to buy houses in Rolleston, forgetting that's near where the first big earthquake was centred."

Melanie Swallow, of QV Valuations, said some house sales had been a knee-jerk reaction to the February quake and the initial flurry of activity was settling down.

She said buying patterns were in some cases based on perceptions of certain suburbs and not facts.

There had been "strong interest" in homes in the northwestern suburbs and in towns in the Selwyn and Waimakariri districts, as long as they were not overpriced.

There was no indication prices in any areas had fallen, Swallow said. Lack of job security had slowed the move of homeowners from first to second homes, she said.

Real Estate Institute figures show that about 80 per cent of Christchurch house sales in March were in the western half of the city.

Prices since the February quake were up compared with a year ago in North Canterbury and in Christchurch suburbs such as Bryndwr, Burnside and Riccarton.

Few sales have been recorded in the eastern and hill suburbs.

Mortgage broker Scott Miller, of Advance Mortgage Solutions, said most sales were now on the west side of town, but buyers in the hardest-hit areas were having no trouble getting loans.

"We've actually had more success getting borrowers across the line than after September, as long as there's replacement insurance."

He said lenders did not always require engineering reports.

The quakes had affected business for mortgage brokers, and he had heard of some having to find ways to supplement their income.

Christchurch's housing market has had its quietest period on record since the February quake, with homes selling at a rate of about six a day in the weeks afterwards.

Advanced Mortgage Solutions | Property Gazette - May

Wed, 11 May 2011 06:58:00 GMT

Interest Rate Outlook

Current Interest Rates
Rates offered are the best of standard, carded interest rates available and do not reflect any discounts your Advisor may be able to obtain for your client. Rates are correct as at 02/5/11.
Variable	5.40%
6 Month Fixed	5.59%
1 Year Fixed	5.55%
2 Year Fixed	6.20%
3 Year Fixed	6.70%
5 Year Fixed	7.45%

These current interest rates sure are nice & cosy, keeping our wallets warm as temperatures start to drop across the country. The Reserve bank last week threw another log on the fire by keeping the official cash rate at its record low of 2.50% allowing the above attractive variable interest rate to remain in place, not only was the rate held but governor Alan Bollard's comments lead most economists to believe that there will be no increase until late this year, if at all and possibly not until the first quarter of 2012.

Of course this all depends on how well and quickly the economy rebounds and it will, as we are coming off historic lows in many sectors. It is this area where caution should be exercised and clients need to remain alert because once the recovery gains momentum we could see interest rates moving quite quickly.

The housing market is already starting to show signs of life with the engine of the Kiwi economy, Auckland, gaining some good momentum through March & April, albeit off the trough of late last year, as this increased activity gathers speed we do believe that property sale numbers will continue to rise & spread across most parts of the country.

The second area of concern for the Reserve Bank will be inflation which is being held in check by consumers continued reluctance to spend on anything other than essential items and it is these items that we have little control over in terms of cost. If inflation were to be measured solely on the essential items such as petrol, electricity, rates & food it would be deemed to be well & truly above the 3% threshold government has set as being manageable.

As such when the housing momentum takes hold and consumer confidence increases resulting in more spending on non essential items we believe inflation will come under pressure, it is at this point in time the Reserve Bank will act swiftly and this could result in a series of Interest rate increases starting sometime in the 4th quarter of this year and continuing through the first half of 2012, accordingly, we do share a word of warning for consumers to keep their eyes & ears open as to interest rate movements because when they start they may continue for 3 or 4 consecutive reviews.

This of course brings us to a recommended borrowing strategy, while the variable interest rate is clearly the cheapest rate on offer and should continue to be so for the baulk of the rest of 2011 be on your toes and prepared to lock in at the first sign of movements, even locking in @ low 6% rates for 18 months or 2 years now could look a very attractive option come early 2012. There is no escaping the fact that if you want certainty in your interest rates you will have to pay a small premium for the peace of mind.

What's Hot

The banks continue to ever so slowly but surely open their credit window wider, just last week we had a main stream bank increase their loan to value ratio for owner occupied property owners back out to 95% which is even available on refinance proposals.

Deal of the Month

A client came to us last month requesting we refinance his investment property loan as he was struggling to maintain the payments. It wasn't the mortgage that was causing this it was his consumer debt, we consolidated his mortgage, car loan & 2 hire purchases which reduced his monthly commitments by over $500.00 - Call us we deliver!

Interviewed by 'The Mortgage Magazine'

Mon, 16 May 2011 01:45:00 GMT

How did you get started?

How did working in the industry come about?

I was a property investor freshly back from spending 12 years in the UK. I didn’t really want to go back to the type of employment I was doing when I left New Zealand so I started looking around at my options. I spent about a year looking around before settling on joining a relatively new mortgage broking company called Investor Finance. They were new to New Zealand after establishing themselves in Australia and promoted the idea of getting into the company at the grass root level. Well let’s say things turned out a little different to how I imagined things would go.

How long have you been a broker? What were you before?

I have been a broker since November 2006. Other employment include - Hospitality Management, Sales Representative, Head of Logistical services.

Has it always been a passion?

I have always had an understanding of figures and a passion for property, so when the opportunity to become a mortgage broker became available I jumped at the chance.

Why mortgage broking?

What is it about broking you love/are passionate about?

Finding the solutions to people’s needs and requirements, it’s fair to say that no two applications are ever the same. First home buyers are always a challenge, however at the same time are often the most rewarding. In one regard first home buyers require the most ‘hand holding’ through the buying process, but the smile on their faces once the finance has been approved and they have confirmed and then purchased their first home is priceless. Seasoned investors are great to deal with as well because the loans they require generally have a degree of depth and difficulty that is not as evident with first home buyers, however you rarely get the same excitement factor from experienced property investors as often it is simply part and parcel of what they do for a living.

How did you learn the business and educate yourself?

Do you have a mentor?

I follow a number of big names in the mortgage broking industry, both in New Zealand and overseas, however I don’t have a personal mentor as such.

Was it self-teaching, did you study?

I was lucky in the fact when I first started to learn my craft I was part of a team of experience mortgage brokers. I was able to ask for their assistance and benefit from their experience. This not only helped me get my early applications across the line but allowed me to pick up valuable experience in a very short period of time. I passed the ‘Mortgage Essentials’ exams with 98.5% which was the highest grade achieved by anyone sitting the exam up to that time. The study and passing of the exams necessary to become a mortgage broker must have worked as in my first year at Investor Finance I was rewarded by winning three awards, namely - Mortgage strategist of the year, highest number of settlements for the year, and highest lead generation of the year.

Best and worst times in the business?

Both Answers to this question revolve around the GFC. The best times were within the first couple of years of becoming a broker. Times back then were good, property investment was the ‘thing’ to do, and there was plenty of business and most of it came to you – great times. Then when things began to turn, nobody really expected the downturn to be so dramatic. At the same time the first company I worked at and cut my teeth at left New Zealand shores to concentrate on their Australian arm. This meant starting my own business from scratch – new logos, stationery, website, office’s and all the other requirements for starting and running your own business. Work was harder to find and I found myself speaking at all sorts of seminars and meetings. I would sometimes find myself talking to a group of investors at a seminar in Auckland one day and doing the same in Queenstown later the same week. Times have changed again and being at the coal face of property finance I can confidently say we are now through the worst. Bigger deals are coming through on a regular basis, lenders policies have relaxed, and interest rates have remained low for an extended period of time.

Best and worst business moves you’ve made?

The best business move I made was going out on my own and starting Advanced Mortgage Solutions at a time when the mortgage broking market was being battered by the GFC. I learned a lot about myself, not the least of which was that I had the skills to survive during a time of turmoil. It was important to me that I could prove I did not need the assistance from an established company to operate in hard times.

The worst moves?

I haven’t really made any yet.

Best and worst advice you’ve received?

Best advice

Keep an up-to-date CRM and regularly contact your clients.

Worst advice

When learning I was told to follow a script when talking to the clients in meetings and over the phone – this was the worst piece of advice I was given as the resulting conversation did not sound like me and it most certainly did not sound natural – Find your owe spiel and sound natural.

Biggest challenge now?

Regulation is bringing a lot of changes to the industry. Up skilling, particularly in the time frames allowed has been challenging. However there has been a positive side effect to regulation as it has been good in weeding out the part-time brokers, or people within related industries ‘having a go’ at completing a mortgage application as they now have to prove their competency within the new regulatory framework set out by the Commerce Commission.

Would you do it all again?

Absolutely, despite the hard times I still loving mortgage broking.

Best business book?

It’s not really a business book, but more relates to money and how money works. ‘ The richest man in Babylon’ by George Samuel Clason is entertaining and the principles are sound.

Is there a typical working day?

I spend most of my days completing tasks in the following order - Answering emails, submitting applications, and meeting existing and new clients wishing to apply for finance. I find the hours in a day can whip past if don’t have some structure.

Top tip?

Keep your CRM up to date and work the hell out of it. Join social networking groups like Linked In, Facebook, Twitter, and YouTube.

Who is the individual that has most inspired you in business?

Richard Branson – his life, books, and achievements are inspiring.

What is your biggest long-term business goal?

To grow AMS into a bigger brand that operates throughout of the main centers in New Zealand. I am pleased to say that this plan is already gathering momentum with a new mortgage broker about to start at the Christchurch office and I have had an expression of interest from a broker in Auckland who is looking at operating under the AMS business model.

How are you preparing for regulation of financial advisers this year and how will this affect your business?

As I mentioned above regulation has brought its own challenges. I have my final exams to sit in March which will bring me up to the standard required by the new regulations. I think that one of the biggest challenges moving forward will be finding and recruiting brokers who have met and attained the required regulatory standard. Of course people looking to becoming a mortgage broker will find it a lot tougher because of regulation than it was even a year ago.