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Mortgage Advice Blog

Get the latest news and tips about mortgage finance and the property market. Scott Miller, mortgage broker from Advanced Mortgage Solutions comments on housing and lending.

Today's announcement on Mortgage Holidays

Published by Scott Miller on Tuesday, March 24, 2020 in

Today’s announcement

With today’s announcement by the Finance Minister about 6-month mortgage holidays, we have been inundated by enquiries from our clients. Although the news is welcome it is extremely short on detail,

As announced by Grant Robertson more details will come about what’s being offered by the banks.

Unfortunately, here is where of the rub of the green that is not so straight forward. As the announcement is not an overarching announcement, it means each bank will have a different interpretation of what the announcement means to them and how they will incorporate the changes to align with their independent and existing policy.

To be clear no bank has announced their position on how to move forward yet.

As mentioned in my earlier communications, a mortgage holiday is not really a holiday, we were hoping to hear information along the lines of a mortgage freeze. However as there is no detail announced yet, there is a chance the meaning of a mortgage holiday (this time) may be different to how they have been implemented up to now.

Some points of interest are:

-          - If the mortgage holiday is processed along the lines of what a mortgage holiday is meant up to now, then when you come off your holiday your mortgage is likely to be much higher than when you started:

  • If you currently have a mortgage of $300,000.00, use an average of a 4% interest rate, and you take a 6-month mortgage holiday, your total mortgage at the end of the mortgage holiday will be approximately $306,000.00.

-          - This in itself does not sound too bad – However if your Loan to Value ratio at the start of the mortgage holiday is 80%, The addition to your mortgage through the mortgage holiday period will then leave you with a Loan to Value ratio higher than 80%. The result of having a Loan to Value ratio higher than 80% is higher interest rates when you go to refix your loans at the time your loan rolls over. In the extreme cases if your current Loan to Value ratio is 95% then you could find that your mortgage is higher than what your house is worth.

Please understand when I say - if a mortgage holiday is the only option for you, then take a mortgage holiday. I am acutely aware of the stresses and strains placed on businesses and individuals at this moment in time, and we will need to do what is needed to see ourselves through these uncertain times.

In summary:

-          Announcements by banks and what it means to their customers is expected very soon.

-          There is no documentation or pathways been made available to action decisions yet.

-          I will be letting you know what the banks release as soon as it comes to hand.

-          We are ready to action requests as soon as the pathways are open to do so.

-          There is likely to be more options than just mortgage holidays

As always, we are here to help, and I am happy for you to call me directly to discuss the above in more detail. We are aware some are hurting more than others and we are pressuring a response from the banks as are all financial advisers.

Please be patient, details will become available and we will be able to action requests once the options are known and understood.

My number 021 34 36 48.

Working for you.

Scott, Greg, Shane and Jo.

February's Property Gazette

Published by Scott Miller on Friday, January 31, 2020 in

Will 2020 be the year you purchase your first home? We think it could be!

The Welcome Home Loan has been re-branded and is now called the First Home Loan. Along with a name change, it is underwritten by Kainga Ora, which is now what Housing New Zealand are known as.

The First Home Loan is available from several different lenders, with as little as a 5% deposit required for first home buyers. If you were struggling to save the old 20% minimum deposit while renting, this may be your chance to own your own home. 

You may also be eligible for a grant from the First Home Grant, also from Kainga Ora. Previously known as the HomeStart Grant, it provides up to $5,000 for a single or $10,000 for couples to purchase an existing home, or $10,000 and $20,000 respectively for a brand new home purchase. Give us a call today and let’s chat about your options.

Eligibility for the First Home Loan

In order to be eligible for the First Home Loan, you will need to meet several criteria, including:

  • A maximum income before tax of $85,000 as a single person, or $130,000 for two or more people.
  • A minimum of 5% deposit of the purchase price.
  • You must be a first home buyer.
  • Your chosen home must cost less than the regional house price cap.
  • You must live in your home and cannot own any other property.
  • Be a Kiwi or have Permanent Residency

Both a pre-approval (before you find a home) and a final approval (after you find a home) are available to borrowers. We recommend seeing us first, before you start looking for your first home. Having pre-approved finance can give you bargaining power when it comes to making an offer. Give us a call to make an appointment to discuss your options.

Does Building Your New Home Tickle Your Fancy?

If you’re in the market for a new home, why not consider building your own? When purchasing an existing home, you are restricted to the market availability. When building your own, the world is your oyster.

With 5% turn-key and 10% constructions deposit options readily available, many buyers are choosing to build their own home. If you’d like a home built specifically to your requirements, give us a call and let’s talk about your home loan options.  

Insurance Matters...........

Paying for Medical Treatment

I listened to a story of a New Zealander who was suffering from brain cancer stating, “Kiwis will die due to unaffordable costs of treatment.”

He also stated "I'm not an advocate for health insurance at all, but I do urge everyone to get it even if you are young, because it could save your life.

"People die because they don't have enough money for these unfunded drugs - I'm going to die because I don't have enough energy to fight and get the money I need; I won't be alive to see my drug get funded."

“If I had medical insurance when I was in my early 20s, before I got sick, I would be able to get this treatment covered, but because I didn’t, I'm being left to die.

"When you're a kid you think your parents will be able to save you or bail you out of situations, but they can't with the cost associated with these drugs.

Questions:

Have you covered all your bases?

Are there expenses you haven’t considered yet like having to fund you own medicine, medical insurance can cover these costs.

Have you planned for a future without you?

For most people there is someone who depends on you, but what if you weren’t there? And what about the everyday costs? Who will cover those? Life insurance will fill those financial gaps even if you’re not there to do it.

How long would you last without your income?

ACC doesn’t cover illness so who does?? Sickness benefit, sick leave, a give a little page? Having personal insurance means you don’t have to rely on your savings while you get back on your feet.

December's Property Gazette

Published by Scott Miller on Monday, December 02, 2019 in

Merry Christmas from the Team and Advanced Mortgage Solutions.

As the festive season arrives, we’d like to take a moment to wish you and your family a very Merry Christmas and best wishes for the New Year. Our office will be closed from 24th December until 13th January, making it vital that you contact us quickly if you are needing pre-approvals before the end of the year.

The growth within the property market has been keeping our team super busy, making lender turn-around times slow. This means factoring in a minimum of 15 working days for any new financing applications with our team.

LVR Restrictions Remain – But We Can Help!

The Reserve Bank has kept the loan to value ratios at no more than 20 percent of residential borrowers to have less than a 20% deposit, and no more than 5 percent of investment borrowers to have less than a 30% deposit.

If you thought owning an investment property is out of reach – chat with us today! We do have access to a stand-alone 20% investment property option, and we’d love to help you obtain it.

 Monthly Team Member Focus: Scott Miller

Having been a long-term property investor both in NZ and overseas, as well as having a strong background in logistics, management and finance, Scott understands the needs of both residential and investment property owners.

With the highest score ever achieved of the New Zealand Mortgage Broker Association’s entry exams under his belt, Scott is well placed to help both the first-time borrower and property investor achieve their ownership dreams.

Since forming Advanced Mortgage Solutions in 2008, his company has gone from strength to strength and is happy to chat with both new and returning clients about their lending needs, including new loans, refinancing, loan restructuring and other lending products.

Give Scott a call to arrange a time to chat about your lending requirements or to ask for advice on organising your property investment portfolio today.

Workers should have redundancy insurance

The Productivity Commission suggested last month that the our government should look at an unemployment insurance scheme and add new benefits to help support people who lose their jobs due to redundancy.

In the report they stated "There is a case to improve income security for displaced workers with income smoothing policies that cushion the financial shock of job loss,"

Did you know?

"If you lose your job, you can apply to go straight onto the unemployment benefit [that's] if you're eligible - a number of people won't be eligible for the unemployment benefit, because it's income tested and if you have a partner their income is factored in as well as the person applying.

Currently if you are made redundant and your employment agreement has redundancy provision included you receive a lump sum pay out. This is designed to cushion the blow of your job loss and assist you to stay on your feet financially.

This is a one size fits all approach that is out dated the commission said.

The commission raised the idea of creating individual redundancy accounts - where workers contribute to a KiwiSaver-type of arrangement or ACC, for which the money is collected from contributions by either the worker, the firm, or both. The amount then paid out if the worker was made redundant would be based on the person's salary prior to being unemployed - with the ACC system, this is set at 80 percent.

(As I write this article there are no specific plans to implement such a scheme).

Did you know?

Cover for redundancy has been available for many years from personal insurers, a good “Mortgage Protection” policy can include a redundancy benefit in the event of job loss.

For most companies you have an option to purchase a “Redundancy Cover Option” which will provide for up to 6 months of mortgage repayment being paid on your behalf in the event that you are made involuntarily redundant by your employer (up to certain limits).

Exclusions to the benefit are clearly spelt out for example if you are aware of any potential redundancies, restructuring, or sale of the assets or shares in your company (whether formally notified or not) redundancy may not be available.

Questions:

  • Do you think anyone can consider their job “safe” now days?
  • If you are put off how long could it take to get employment?
  • Consider how long could you survive without an income while you are looking for a new job, how would you pay the mortgage or your rent for the home you live in.

If you’d like to know more or would if you would like to see how insurance cover would best suit you and your circumstances feel free to contact me.

November's Property Gazette

Published by Scott Miller on Wednesday, October 30, 2019 in

Does a 5% Deposit Sound Good to You?

There have recently been some major changes to the Welcome Home Loan. Taking effect on the 1st of October 2019, these changes were made to increase the number of first-time homeowners throughout the country.

Now called the First Home Loan, the required deposit has dropped from 10% to 5%. This is for both new and existing homes which have a purchase price less than the maximum cap for your region. Like with the Welcome Home Loan, there are income caps, with a maximum income of up to $85,000 for one person or $130,000 for two or more people. Another point to note is that as well as first home buyers, previous homeowners are now also eligible as long as they are in a similar financial position to a first home buyer.

Of course, to take advantage of the First Home Loan, you need to meet the requirements of the lender to service the loan. If you’re not sure what you could afford, book a time to come see us for a chat.

Interest Rates Are Low - Will They Drop Further?

Homebuyers are taking advantage of record low-interest rates, but many believe the best is yet to come. Low inflation levels led the Reserve Bank to drop the OCR and hint that further drops are likely. With the settling of the housing market, home buyers are now in a much stronger position. Having pre-approval for a loan gives you a significant advantage, so chat with us about how we can help you obtain this. Now is also a good time to talk with us about fixing your mortgage to take advantage of low-interest rates, such as paying your loan off sooner.

Spotlight on Greg Miller

As a Registered Financial Adviser, Greg works as the second Mortgage Advisor in our team alongside his brother Scott. Having returned from ten years working and living in the UK, Greg is enjoying being back home surrounded by friends and family.

He is available to offer advice and support for clients seeking advice on both mortgages and insurance.  Both new and existing clients are welcome to give Greg a call or make a time to meet up with him.

Insurance Matters……..

What Policies do I Need?

When talking with “Advanced” customers we are always very clear that bank need their security insured as a minimum insurance requirement, this is not  an option. However the need for them to have insurance (lives, income or mortgage) is an option, however without insurance your options are severely reduced should you be off work or worse face an unexpected loss of the main income earner.

Kiwi’s up until the last few years have placed more value on their house and car than they do health and mortgage cover if current insurance trends are anything to go by.

In 2012 statistics showed 95 per cent of New Zealanders' insured their homes and cars, this insurance for most people was requirement by either a bank who had a mortgage on their house or a finance company who had an interest in the vehicle.

But when it comes to what is most valuable (our lives and the ability to earn) 57 per cent insured their lives, and just 20 per cent had income protection insurance.

Taking the time deciding the right balance of personal insurance is worth it, as no two peoples needs are the same, whether a policy is good value for money and how it compared with other products for you is important.

Being debt-free with no dependents may not need any life insurance, but as soon as you start a family you need to assess your options, if fact we’d recommend assessing this as early as possible. On the other hand as soon as you have debts or dependents it's  important to think about how much cover you need."

The Financial Services Council of New Zealand (FSC), which represents life and income protection insurance companies, said people did not know how much insurance they needed, or were not confident about making a purchase.

At Advanced Mortgage and Insurance Solutions we work with clients to ensure each home loan is tailored to suit their individual needs including protection for their loan.

If you’d like to know more our promise to you across our services is to understand your personal circumstances and to make your home loan experience easy.

October's Property Gazette

Published by Scott Miller on Tuesday, October 01, 2019 in

Have You Got Your Preapproval Sorted Yet?

With less than three months left of 2019, if you haven’t already, now is the time to get your loan preapproval sorted. The property of your dreams is just around the corner, and with the lead up to Christmas, everyone wants to have their purchase signed off and completed before then. Having your loan preapproved means that you can move as soon as you find the perfect property, as well as giving you an advantage over other purchasers. For assistance in obtaining your mortgage preapproval, get in touch with us today.

First Home Loans is Ideal for First Home Buyers

If you are a first home buyer, we recommend that you seriously consider applying for the Welcome Home Loan product (now called the First Home Loans Product). As only a 5% deposit is required (reduced from 10% today), first home buyers are able to get into the property market earlier than they may have been expecting.

There are specific requirements that must be met in order to be eligible for this loan product, such as:

  • below a joint income of $130,000 or less, or $85,000 or less for a single borrower
  • an NZ citizen or Permanent Resident Visa holder
  • have a minimum 5% deposit
  • purchase a property to live in which is below your regional price cap

For further information on these criteria or information on how to apply for your Welcome Home Loan, get in touch with us today.

Spotlight on Shane Blummont – Insurance Advisor

Shane is our resident insurance advisor and has been in the industry for over 30 years, we’re excited to have him on our team. With extensive experience in the areas of life, trauma, income protection, fire and general insurance, he is well placed to assist you with all of your insurance requirements. Shane enjoys spending time with his family and taking his mountain bike out for a ride. For insurance solutions tailored to meet your specific needs, contact Shane today.

Insurance Matters…………

Protecting What is Valuable

It makes sense to protect what is valuable, recently I heard it said it was sensible for people building a new home to take out insurance.

The insurance was not only on the bricks and mortar but on builders going broke or being shut down, new houses left unfinished, deposits lost.

Some say that this is a risk that the insurance industry has a role to play in sharing, with the idea that you need something in the background to protect you.

Interestingly insurers are not queuing up to offer this protection because insurers regarded the construction sector as too risky.

When it comes to a life what value should we place on this and what are the risks?

In New Zealand in most cases if you are incapacitated by illness or diseases you are eligible to receive free or subsidised health or disability services, we are so to fortunate have a public health system.

However, there is no compensation for loss of income or cover to pay the bills, this is where Mortgage and Income insurance come in.

In this case insurers are willing to share the risk offering compensation to assist with mortgage and living expenses.

Mortgage repayment and income protection insurance are similar, both insurance products are designed to pay you a series of ongoing payments in the event that you're unable to work for a period of time.

For some more information on these types of insurance covers please feel free to contact us.

 

Scott, Greg, Shane and Jo

Advanced Mortgage and Insurance Solutions Limited.

September's Property Gazette

Published by Scott Miller on Wednesday, August 28, 2019 in

A Big Drop, But Is There More to Come?

When the expected 25 basis point drop of the Official Cash Rate was replaced by a 50 point drop, there were plenty of surprised New Zealanders. The unexpectedly large drop was explained by the Reserve Bank as necessary to meet its inflation and employment objectives. Financial experts are predicting that there will be more drops to come in the short-term, but most likely smaller in basis points. 

The question then becomes, is now a good time to fix or float? Get in touch, and let’s chat about your specific circumstances for the right answer.

Springtime is Ideal for House Hunting

As the weather is warmer, the days are getting longer and (hopefully) there is less rain, September is a great month for house hunting. You can expect more homeowners to list their properties, knowing that they’ll look more appealing in the sunshine. Agents are able to offer better viewing hours, giving buyers more opportunity to view homes, which in turn encourages more people to start looking. 

Chances are that if you’re looking for a property, the springtime weather combined with the appearance of more homes on the market means it’s time for you to start house hunting too. But before you start, chat with us about organising mortgage pre-approval to give you an advantage over other purchasers.

Spotlight on Jo Henderson – Our Office Manager

Having joined the team at Advanced Mortgage Solutions in 2016, Jo quickly settled into her role as Office Manager. With a strong background in the banking sector, Jo will easily help guide you through the mortgage application process, while keeping you updated with its progress.

Outside of work, Jo has a passion for travel, is happily married and has been blessed with two adult sons and two adorable grandchildren. Working alongside Scott and the team, Jo is available to chat with all clients and looks forward to hearing from you in the near future.

Insurance Matters........

What is risk?

We’ve all coined the phrase “that’s a risky business” but what do we mean when we say this?

The Oxford dictionary definition of risk is that it is the exposure (someone or something valued) to danger, harm, or loss.

In our lives is there any situation where we really want to be exposed to something that could harm us?

When it comes to financial risk there are a number of differing views with not everyone having the same thinking about financial risk.

For example after arranging mortgage finance we recommend protecting this with a policy that can help cover mortgage payments from the risk of being unable to work from a disability. i.e. the risk that we do not have the funds available to meet the costs associated when an event occurs.

Sometimes I hear the following in response to this advice:

  • “We’ll be right, we’ll just lean on our parents for a while”

  • “We are both healthy we don’t need this at this stage, we’ll look at it later on”

  • “If the worst happened (meaning death) we’ll just sell the house”

At the other end of the spectrum there are a number of people wanting to protect themselves against all risks.

What is your personal risk tolerance?

High (can accept risk and self-insure for a lot of my needs)

Medium  (can take some risk but have an insurance fall back for some areas)

Low (will have cover for most of my risks, want to protect the unforeseen)

What we believe or the value system we were brought up may determine the level of importance you place on your needs or risk. For example, the provision of being able to meet financial needs throughout life and having a retirement fund may be an absolute ‘must have’ for some people, but not so much for others.

If you want to avoid “risky business” talk to us and see where you can protect what matters to you.

August's Property Gazette

Published by Scott Miller on Wednesday, July 31, 2019 in

Be Prepared for an OCR Drop

Word on the street, or rather the predictions from several prominent economists, is that we are likely to see an upcoming OCR drop. The Official Cash Rate is forecasted to drop by .25% on the 7th of August. This means that another round of interest rate cuts is likely, along with the possibility of a further drop of the OCR to 1%.

The OCR drop makes it more appealing than ever to purchase or build your new home. Builds are our speciality and we’d be thrilled to help you obtain a turn-key or construction loan. With 14 years of experience and hundreds of building options, we’re Christchurch’s (and the rest of New Zealand’s) expert build financing team. Get in touch with us to learn more.

New Business on the Horizon Or Need Cash for an Existing Business?

If you’re considering starting up or purchasing a business, we can help with a business loan. While there are business grants available, the criteria are long and the competition plenty. Obtaining a business loan is often the easiest and fastest way to kickstart a new business.

We can help you obtain a business loan for the initial and ongoing costs of running a business, including:

Cashflow – income is often varied for most small businesses, and cash flow can be tight some months. A business loan will give you the cash on hand to pay your suppliers immediately and maintain good working relationships with them. It can also help you with hiring extra staff during busy periods or maintaining the day-to-day costs of running a business.

Stock purchasing – when you purchase stock in bulk, you are often able to obtain a better discount. This could be passed onto your customers or added to your profits. A business loan gives you the ability to purchase materials upfront for a big project, or to take advantage of seasonal deals.

Expansion costs – as technology changes, the machinery your business relies upon becomes outdated or not as cost-effective as in the past to operate. A business loan lets you purchase new or renovate existing machinery and technology to help your business grow. It could also be used to pay for an extensive marketing campaign, useful to get a new business off the ground.

 Best of all, we can offer a 24-hour turn around on new business loans too!

Insurance Matters……….

You have to take Risks to live but also you have to minimize risks to live.

Achieving the goal of home ownership requires some effort, for most ownership starts with a mortgage.

To achieve this there are a few boxes to tick, some of these are as follows:

  • passing a credit check,
  • have ongoing income to meet affordability,
  • have enough funds on hand for a deposit (this may be made up of a home start grant coupled with a Kiwi saver contribution)
  • Find a property that comes within your loan limit

Will job loss ruin house purchase?

So you tick all the boxes and you are now unconditional on a property with a settlement date looming when your employer announces a restructure and you could be out of work.

This is a curve ball no one wants when there is the possibility of losing the home, a contract deposit or both of these. If you have nice vendors that are willing to delay settlement without charging penalty interest then you are in luck! But usually if settlement is delayed without mutual agreement, then penalty interest would be charged at the rate agreed on the contract.

If you are unable to complete the purchase entirely, then you can be sued by the vendor for specific performance or lose your deposit (not more than 10%) and can be sued by the vendor for damages claimable at common law or in equity and shall also include any loss incurred by the vendor.

Is there anything you can do to protect yourself?

Yes, Redundancy options are available via mortgage repayment policy,  Mortgage Repayment Cover pays can pay up to forty five percentage of your salary or your full mortgage payments to ensure your loan repayments are covered in the event of being made redundant.

Getting finances sorted for a property purchase isn't easy but once you achieve this it pays to protect them so talk to us to understand what is achievable for you.

 

July's Property Gazette

Published by Scott Miller on Monday, July 15, 2019 in

Low-Interest Rates & Low Deposits: What Else Could You Ask For?

The weather is getting colder, but the interest rate wars are heating up! For the first time in many years, low-interest rates are tempting borrowers with a range of fixed-term options. We’ve got access to lenders who are offering interest rates of less than 4% for their 1, 2 and 3-year fixed term loans. It just doesn’t get any better than this, and we’d love you to take advantage of these rates.

By taking advantage of these super low fixed-term rates, you could find yourself:

  • Paying less interest overall, if you make more than minimum repayments
  • Quickly increasing the equity in your property
  • Keeping your repayments low, if you make minimum repayments
  • Being able to consolidate other debt into your home loan to save on interest costs

Whether you’re looking at a new loan or refinancing an existing loan, we can help. Get in touch and let’s make a time to chat over coffee.

Buying a Rental with 20% Deposit? Yes, It Is Possible!

Only have a 20% deposit, but want to purchase a rental property? If you visit a bank, they’ll most likely turn you down. That’s because they need you to have a 30% deposit. Often, that’s just not achievable for many borrowers, due to rising house prices and tied up equity. So, what can you do?

Simple: come see us. We have access to a new funding line only available to NZFSG mortgage brokers. We have access to a range of lenders who are happy to work with you and your 20% deposit. Whether it’s your first rental or your tenth, we promise to help you obtain the right loan and at the best rate possible. Give us a call today and find out just how easy and affordable it is to purchase your rental property!

Let’s Welcome Greg Miller: Our Newest Mortgage Adviser

We’re thrilled to announce the arrival of Greg Miller to the Advanced Mortgage & Insurance Solutions! Greg is joining our busy team as a mortgage adviser and can help you with obtaining new loans or refinancing existing loans for both residential and investment properties.

Greg spent 10 years living in the UK, he enjoyed the hustle and bustle of Europe and travel abroad however, it was the open uncrowded spaces of NZ that he missed and returned home and started a Family.

Having owned many businesses over the last 25 years, including in Property Management and Maintenance, where client satisfaction in paramount, Greg brings a wealth of experience which puts him well placed to move seamlessly into the Mortgage Advising role.

In 2016 Greg completed his New Zealand Certificate in Financial Services, achieved accreditation with all the major Banks and became a Registered Financial Adviser.

Helping people realise their goals and knowing you have made a difference is what Greg loves about becoming a Mortgage Adviser.

Greg has recently joined Advanced Mortgage Solutions as the second Mortgage Adviser alongside Scott, he finds it as a great opportunity to join a fantastic experienced team which just loves to help people who are seeking advice on Mortgages and Insurance.

Interests include, cycling, running, motorsport and spending time with family and friends.

Insurance Matters……..

Thrill seekers carry own risk

A high percentage of Kiwi’s are thrill seekers, we’ll give most things a go and not take into account the risk if it all goes wrong.

With my insurance hat on I like to quote Tim Grafton from the NZ insurance Council with some thoughtful insights on insurance.

"The challenge we face with insurance is that it is unique among consumer products. It's something you pay for but hope never to have to use, unlike a car or an internet connection. It works because the majority of people pay for the misfortunes of the few, and each of those misfortunes comes with highly personalised circumstances. That's the conundrum insurers face: most people seldom claim."

There has been a number of articles in the media this month on insurance, these have raised a number of points, here are some of the headlines:

“Is it worth it? Travel insurance claim ends in $33 payout”

Here the value of insurance is questioned when the benefit paid seems insignificant .i.e. is the cost of insurance worth what I get out?

“Insurers: Consumer NZ should give us a fair go”

Here NZ insurers pushed back at recent Consumer NZ report claiming 13 percent had confidence in the industry and only 8 per cent offered fair terms.

In response to the Consumer report Tim Grafton focused on the positive outcomes of claims stating “that more than 90 per cent of claims were paid and most that were not were withdrawn because they were for less than the policy excess or outside the scope of the policy, or because people did not want to lose a no-claims bonus.”

An Element of Risk

There is a risk in living and this usually has a financial impact if your ability to earn is affected. No matter what you do for a job, or where you are in life, there’s always a requirement to protect yourself and your loved ones. Did you realise this?

The ability to earn a living is far and away your largest asset to maintain your present lifestyle.  Life can change so unexpectedly – you have no idea when you’ll “need” insurance.

That’s why it’s important to plan in advance.

To find out more call us today on 03 6629058.

June's Property Gazette

Published by Scott Miller on Wednesday, June 05, 2019 in

OCR Drop Results in Lower Rates

We are happy that we called the Official Cash Rate reduction correctly: the OCR has lowered again from 1.75 to 1.5%, which is a record low for New Zealand. This drop led to many lenders reducing their interest rates, which is a win for borrowers. With interest rates likely to remain low until late next year it could be a good time to increase your loan’s minimum repayments. We’re more than happy to discuss this and other options with you, so give us a call.

Less Than 20% Deposit? No Worries

Good news: if you have less than a 20% deposit, you can still own a home. There are currently plenty of low equity loan options available from the lenders we work with. This is great news for first home buyers who are seeking a foothold into the market. We can also help you navigate the process of using your KiwiSaver balance as all or a part of your deposit too. We’ve put together a handy guide which explains this, plus the HomeStart Grant and Welcome Home Loan. You can also book a time to come and see us for a chat, where we can discuss the best option for you and your family.

Planning on Building? Get Started on the Right Foot

The way lenders approach the building process has changed and the days of on-site progress inspections have long gone. Nowadays, there are two main options: construction loans and land and build packages (also known as turn-key builds).

Construction loans are the more traditional of the two but has a more complex application process. The information required by the lender considerably greater, such as a fixed price contract, council approval and consent, a registered valuation and your builder proving they have Builder’s Risk Insurance in place. 

 Land and build packages are less complicated as the builder organises most of the building process. Applying for a loan is simpler, and a registered valuation is still required. Check out our handy guide Loans for Turnkey Homes or Construction Loans – Which is Best? For further information, and then book a time to come and see us.

Insurance in New Zealand is changing

This headline appeared in the local paper last month, the focus was on the rapid change in the way home insurance is being offered. Highlighted was the pricing model for house insurance called “risk-based pricing” which has seen premiums on house insurance increase in some suburbs by four hundred percent.

"Risk-based pricing means if you buy a home that is considered a risk (usually by its region and then suburb) there is no longer a rite of passage to get insurance cover for the property. And if you do get cover you may be paying a substantial percentage higher than for a similar property across the other side of town.

We do the Homework for You

When you arrange a mortgage through us, we can assist you with what to look out for when you are considering a property, e.g. knowing what the technical categories mean, lining up the paper work from earthquake claims (and confirming repair work is complete) and if local flood zones will affect the property.

But there is more than just the property insurance that you need to consider when getting a mortgage.

Your Greatest Asset A Low Priority

This heading may seem like an oxymoron i.e. something is great but at the same time is a low priority, here we are referring to the greatest risk which is you and your ability to meet all your financial commitments. When you consider the value of your life and the ability to pay your way compared to the value of property would you be prepared to take the risk and not protect it?

Unlike property insurance where claims events have heavily affected the current market, cover for life, income and mortgage are still a rite of passage.

If we can assist you in this important area please let us know.

May's Property Gazette

Published by Scott Miller on Tuesday, April 30, 2019 in

Will May Bring Us Any OCR Movement?

In March, Reserve Bank Governor Adrian Orr implied that any future movement in the OCR is likely to be downwards. With domestic growth slowing and a weaker global economic outlook, economists are therefore predicting:

  • There is a 50/50 chance of the OCR dropping .25% on May 8th 2019
  • A further drop to 1.25% is possible in August or November

Economists noted that the RNBZ Governor did not refer to his past statements of keeping the OCR stable until the end of the year and into 2020.

While in the past, many drops in the OCR have led to a reduction of interest rates; this may not be the case this time. The capital requirements held by the lenders are rising, making it highly unlikely that full savings will be passed onto mortgage holders.

It’s not all bad news though. Interest rates are still at record lows, and we can help you access them. Get in touch with our team today and let’s work together to get you the best rates.

Tips on Buying a Home During the Colder Months

Should you be looking for a home during Autumn or Winter? We say yes! While the warmer months have the advantage of longer days and balmy weather, now is an ideal time for house hunting.

Traditionally there are fewer homes on the market during the cooler months. On the plus side, there are usually fewer people searching for homes, which means less competition. Eager sellers are ready to sell now, and this puts you in a great place to negotiate the price.

There are some challenges though, and these are often weather-related. You may be reluctant to view the exterior of a home in poor weather. Crawling in the ceiling space or under the floor won’t be high on your priority list. You may also be unable to view a property during daylight hours, seeing it only after dusk. These challenges have the potential to cause trouble down the road for you if you purchase a home without seeing fully what you’re buying. As well as making time to visit the property during the day, we also recommend you contact a property inspection professional who can perform the necessary inspections on your behalf.

 For personal advice and support when purchasing a property, you can rely on us. Give us a call today.

MEET THE THREE TYPES OF INSURANCE BUYERS

In our digital world, people are increasingly comfortable purchasing almost everything online. However, before you press ‘buy’ on a complex product such as life insurance, we recommend you get advice from a registered financial advisor like us 😊. When it comes to how people approach buying life insurance, research conducted by Australian Securities and Investment Commission identified three types of insurance buyers:

Methodical Buyers

Methodical buyers research insurance on the internet to learn about different policy types and brands. They use comparison sites and sometimes insurance providers’ sites, make one or two phone calls to providers, focus on one brand and think about their needs before buying. They like being able to ask specific questions and appreciate a call back — but don’t like repeated calls,  they’re also conscious of the fact that policies are different, and they fear that there is going to be some little trap that they miss.

Pragmatic Buyers

Pragmatic buyers want to ‘get it over with’. They take a brief ‘look and see’, sometimes using the internet, decide how much they can afford to spend and then approach a provider. They are more likely to change their mind about their policy choice during the sale process. 

A typical comment came from a buyer who chose the cheapest policy: ‘It’s better than nothing. It will be enough.’ 

Emotional Buyers

Emotional buyers are often influenced by emotional appeals during the sales process. They are often anxious that they are not doing enough for their family. They want to ‘leave something for the kids’, enjoy interacting with a salesperson and feel an obligation to them — they ‘can’t say no’. They often spend a long time in the sales call and buy in a single call. 

What Type Of Buyer Are You?

Whether your are methodical, pragmatic or emotional it doesn’t really matter as long as you’ve taken steps to protect your financial future.

Talk to us today we’d value giving you face to face advice.


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