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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.

April's Property Gazette

Published by Scott Miller on Monday, April 01, 2019 in

Bank Wars, Slow Lending Assessments & Looming Rental Shortages

There’s a bank war heating up, and it’s looking good for home buyers! The major banks have one by one been dropping their fixed one and two-year rates to a record low of 3.99%.

If you haven’t yet taken advantage of these extremely low rates, call us now. We can make obtaining the home of your dreams easy by talking with the banks on your behalf and get you the best deal possible.

These rates are also available for those looking to re-fix their existing loans that are about to rollover.

Slow Lending Assessments Stall Home Buyers

Due to the high levels of applications the lenders are receiving the banks turn-around times are a little stretched at the moment. This means it is taking 4-5 days to have our applications accessed.

Having a preapproval completed before purchasing can simplify the process and reduce waiting times due to having an approval in the system. There is no need to wait for the full assessment process, and you are likely to hear back quickly on the outcome of finding a property.

If you don’t have mortgage pre-approval, acting quickly to secure a loan when you’ve had an offer accepted is critical. We can help with this: book a time to meet up now.

Looming Rental Shortages in Christchurch

If low interest rates haven’t tempted you to purchase your first home, perhaps higher rents will. As residential rental property shortages appear, Christchurch tenants will see rents beginning to rise. Why pay more rent to your landlord when you could be using it to pay off your home loan instead?

If you are looking at purchasing an investment property, now is the right time for you too. Low interest rates coupled with rising rents are a landlord’s dream. We can help you gain a foothold into the rental market to allow you to reap the rewards of becoming a property investor.

It Really Pays To Count The Cost.

Committing to a mortgage is for most the biggest financial commit that is made during a life time, so it really does pay to count the cost so you can reduce the risk of financial hardship.

What should I count?

Suggest you start with the basics the day to day cost of living, if your under financial stress when life does go out of shape if you can pay the bills that’s a help.

Ask the following:

  • What is the risk I would be insuring against? This could be death, a fire at home, or the car getting stolen. Or getting sick and not being able to work.
  • What are the chances of it occurring? There’s probably a small risk of a fire in your home, but it will cost a lot if it happens. The chance of your car being damaged or stolen is much higher, but the costs probably won’t be as high as losing your home.
  • What would happen? Would your family be able to pay for funeral and legal expenses in the event of your death, and how would they manage without your income? If there was a fire in your home, would you be able to replace the house (if you own it, that is) and all your possessions, or would you lose them completely?
  • How much would it cost? Would you have enough money saved to cover the cost and would you want to use your savings for this? (Would you be forced to dip into your retirement savings?)

If you can’t afford for something to happen, you should seriously consider taking out insurance.

Statistics:

Income/Mortgage Cover

-      The average household expenditure is around $1,300 per week

-      In 2018, the Jobseeker Support Benefit was $215 per week for a single person aged 25 + or $358 for a couple

-      24% of the general population in NZ have a disability

-      In 2017 the average weekly household mortgage repayment expenditure is $436 per week

Disability Cover

-      During the June 2018 quarter, there were 92,642 people aged between 18-64 in receipt of Support Living Payment.

-      There are an estimated 60,000 stroke survivors in NZ; many are disabled and in need of significant daily support.

We have seen the benefit for Advanced customers who have the above policies and have needed to claim.

The financial options it gives them during a time that is difficult is a positive helping with recovery and protecting the home and loan.

Give us a call on 0508 466 356 and let’s meet up for coffee to discuss buying your dream home.

March's Property Gazette

Published by Scott Miller on Wednesday, February 27, 2019 in

And the winner is……….

Were Celebrating Our Latest Award!

We are thrilled to announce that at the New Zealand Financial Services Awards, we picked up 3rd place in the Overall Business of the Year Award for the Southern Region. Its wonderful to receive external recognition of the talented team we have. A huge thank you is also needed for all the support we have received, which has made it possible for us to receive such a high accolade from the New Zealand Financial Services Group.

To work with our award winning team, give us a call on 0505 466 356 or send us a message via our contact page.

The Royal Commission

With the recent Hayne Royal Commission report on Australias banking sector calling for an overhaul, its likely well see changes occurring rapidly at our neighbours over the ditch. However, business remains as usual here in New Zealand. As for whether changes will occur locally, time will tell, but should there be any, you can be assured we will fully support them.

One of the recommendations calls for changes to the commissions received for insurance products, including declarations. Our company has always declared the income we receive from commissions, even though we are not required to by law. We will continue to provide full disclosure in regards of what we do and receive. If youd like to learn more, get in touch with us to arrange a time for a chat over a cuppa.

Understanding Industry Jargon When Buying a Home

When you begin looking for your first home, you are thrown into a world with a completely new vocabulary. Youll hear agents talk about exclusive authority, lawyers discussing caveats, and financial providers discussing market value. We pride ourselves on ensuring our customers understand exactly what we say but know that others may not. So, weve created a great list of industry related jargon which explains the most common terms you will come across when purchasing your home. Check out our Jargon Buster on our website today.

Advice or No Advice (Is this the question?)

Recently the government made a surprise announcement from the release of a report from the Financial Market Authority and Reserve Bank that they would be further regulating the industry. This could have the flow on effect that reduces the quality of advisers in the industry.

The noise lasted for approx. 3 days before the dust settled from the actual and implied criticism.

The life insurance sales process is complex, and the New Zealand market has its own, unique idiosyncrasies such as ACC and other government entitlements. Adding to this New Zealand has a significant problem with under insurance which, coupled with relatively low financial literacy, makes it all the more important that sound advice is given when taking up a mortgage.

We are encouraged that our regulators have expressed a desire not to worsen the under insurance gap which exists in New Zealand, something that we certainly agree with.

We are committed to being part of a robust advice industry which is independent of any one product provider and can therefore offer consumers not only individualised personal advice, but also product choice.

If you havent talked to us already feel free to give us a call today.

February's Property Gazette

Published by Scott Miller on Monday, January 28, 2019 in

How Are You Placed for 2019?

How are you placed for 2019? Is this the year you will purchase your first home? Or will you use your home’s equity to enter the rental property market? Or will this be the year you can refinance your mortgage to achieve a lower interest rate?

2019 by all accounts is looking positive for first home buyers thanks to the easing of the loan to value ratios by the Reserve Bank in January. Lenders are now able to have up to 20% of all new mortgage loans to owner-occupiers with deposits of less than 20%, up from 15%. Lenders can also give up to 5% of new mortgage loans to a property investor who has less than a 30% deposit too.

If there are any signs of the RBNZ easing further, you can be sure we’ll let you know as soon as possible, so make certain you check our blog for the latest information.

What’s Going to Happen with Interest Rates This Year?

Both new borrowers and those looking to refinance their mortgage are in luck, with interest rates set to remain at record low levels until the beginning of 2021. Some lenders are predicting that the OCR will drop further to one per cent, with others saying it will remain at 1.75% until 2021.

While we don’t have a crystal ball, the confirmation from the RBNZ governor that they expect to keep the OCR at this level into 2020 as a sign of low-interest rates remaining.

Do You Have Mortgage Protection or Income Protection Insurance?

Having a mortgage requires you to make regular repayments to remain in ownership of your property. Failure to do so can result in a mortgagee sale and affect your ability to borrow in the future.

If you were unable to make mortgage payments due to illness, disability, redundancy or any other change of circumstances, what would you do?

Having mortgage protection insurance covers your repayments if you are unable to meet them. Each month an agreed lump sum will be paid to you, allowing you the opportunity to remain in your home.

Income protection insurance also pays you an agreed monthly lump sum, from which you can pay your mortgage and other associated living costs.

We recommend talking with our insurance advisor Shane Blummont about your specific circumstances, and he’ll be happy to give you a no-obligation free quote for the most suitable insurance product for you.

As always, our team is here to help. Please contact us directly for advice on both mortgage and insurance products today.

December's Property Gazette

Published by Scott Miller on Saturday, December 01, 2018 in

We’re Wrapping Up 2018 – Almost!


It’s that time of the year again! The team at Advanced Mortgage & Insurance Solutions would like to wish everyone a Merry Christmas and a fruitful 2019! We’re thrilled we were able to make obtaining or re-fixing loans for our clients a breeze during the year. Instead of taking our word for it, check out the fabulous feedback we’ve received!

With life in general becoming busier, it’s great to take time to spend and relax with friends and family over the holiday period. We hope that you too will be able to take a break and recover for what is looking like a fabulous year to come in 2019!

Our office will be closed from end of business on the 21st December, and will reopen on the 21st January. We will have a skeleton staff available throughout that time if required though. You can still get in touch with us during the holidays through our website, or call us on 0508 466 356.

Record Low Interest Rates Make a Great Gift!


Our office is humming, and we expect it to remain so right up until the 21st December! Record low interest rates have certainly encouraged both first home buyers and investors to take a more active approach in the market. Many existing home owners are also taking the opportunity to increase their mortgage to complete well overdue renovations, or to even upgrade to a larger property due to a growing family.

With plenty of great cashbacks being offered by lenders, plus the low fixed rates on offer, now is the perfect time to come and see us! We’ll do the legwork to find you the perfect loan which suits your needs. It’s even possible for us to apply for discounted interest rates on your existing loan too, so don’t fret if you’re locked into a fixed term at the moment.

 

Insurance advice for the festive season


12 Tips for Staying Safe Leading Up To Christmas


12 Cooking

Keep an eye on what you fry – a pan of oil, even on the BBQ, can ignite in under a minute. Also remember to keep your bbq away from the house, hedges or anything flammable - it would pay to keep a fire extinguisher handy (especially for me!).

11 Presents

Gifts under the tree are tempting for thieves so make sure they, and other valuables, can’t be seen from the outside your home.

10 Cash

Keep your wits about you when taking cash out of an ATM, it’s best to keep all valuables, including cash, out of sight.

9 Parking the Car

In the “silly season” people can be silly and it can take multipal trips to the mail to get all your Christmas gifts, so take care when driving/parking – be courteous, patient and if you ding someone else’s parked car, do the right thing and leave a note with your details.

8 Lock it or lose it

Don’t leave your belongings unattended, even if it’s just for a matter of seconds while you get cutlery at a café or a can of beans at the supermarket. Thieves are often opportunistic and may take advantage of your inattention.

7 Shopping bags (not plastic)

If you need to leave items in your car then keep your shopping in the boot where it can’t be seen.

6 Security options

Secure your property, especially if you are away on holiday, if you have security lights make sure they are working, deadlocks on doors and windows will deter thief’s. Are there items that could help burglars get into your home like wheelie bins and ladders and avoid posting your location on social media.

5 Smoke alarms

The Fire Service recommends long-life photoelectric type smoke alarms and at a minimum of five and remember to test them regularly to ensure they operate effectively.

4 Days at the beach

It’s best not taking valuables with you or leaving them unattended while at the beach, enough said.

3 Road trips

If you’re on the road over the over the holiday period some simple preparation while help you get there safely:

Be rested Checked your vehicle over Avoid distractions – (your phone is on hands-free) Pack some activities to keep the kids occupied

2 Visits to rellies

Before you set pop out to see the rallies as part of the road trip, remove all the things you don’t need to leave in the car while you’re parked outside. If you don’t want to take it with you then leave it in the boot and out of view.

1 Update your insurance! 

At Christmas you may have added new items to your house, holiday home, or caravan, it only takes a few minutes, to check you have enough insurance cover for your home and contents.

 

As always, we’re here to help! Pop in to our Christchurch office or drop us a line to arrange a time which best suits you.

Happy Holidays Everyone!

Scott, Shane and Jo

November's Property Gazette

Published by Scott Miller on Thursday, November 01, 2018 in

Explaining the Responsible Lending Code & How it Affects You

Have you noticed that many borrowers have recently begun finding it harder to obtain finance? The Responsible Lending Code has been designed to ensure lenders follow set guidelines when approving finance for lenders. This includes providing the following disclosures:

  • Let borrowers know the T&C’s plus costs of borrowing on their website or in their place of business
  • Give you all the important information you need in writing
  • Provide you with information in writing upon request, including the T&C’s, costs and contract terms

All disclosures must be made before any loan is started. The lender also needs to check your financial position thoroughly before agreeing to the loan. They must satisfy that they believe you can meet the repayments and they are in line with your income and other expenses.

We can help you navigate the maze which the Responsible Lending Code has resulted in. Give us a call today for assistance with obtaining your home loan.

Why A Good Loan Structure is Important

Having the best possible loan structure for your mortgage is essential to keep your costs down. It can include having one or a combination of floating or fixed rates, short-term fixed rates a principal and interest loan, or simply an interest-only loan. The best structure for you will be one which suits your goals, achieves you the lowest costs for your situation.

With over 14 years in the home loan industry, Scott can tailor make a mortgage structure which suits your needs perfectly. Get in touch with Scott for a chat about your requirements today.

Regulation within the mortgage lending industry is predicted to continue to rise. You can relax in knowing that we will continue to offer the highest service available to our clients. We would love to welcome you to our client base and make obtaining a mortgage as stress-free as possible for you. Get in touch with our team to learn more about how we help you.

Wondering About Giving Up on Your Insurance?

Ever start to wonder whether if you would be better off to save money instead of paying insurance premiums year after year (commonly called “self-insure”).

Insurance premiums rise each year, driving many people to give up on insurance, sometimes the idea of saving premiums rather than giving them to a company seems good idea, right?

Before you set up that account here a few points to consider.

Understand the Risks you're taking

In a nutshell consider what you pay in premiums versus the likelihood of a claim.

Health Insurance

If you’re under 40 female, non-smoker, you’ll pay up to $30 dollars a fortnight for good basic cover.

Average cost of breast cancer treatment is $28,074 (Ministry of Health figures of average cost) It would take approx. 35 years to save that at $30 fortnight.

Do you need it?

For those uncalculatable odds of having a difficult illness and having to pay for non-Pharmac funded drugs the answer is yes.

Income protection

Based again on 40-year-old, non-smoking female, premiums could be up to $6o a fortnight for $4700 a month benefit (paying up age 65).

Without a personal insurer the challenge here is to have the ability to have enough reserves to be self-supporting. Very quickly it is easy to calculate there is a challenge to save anything like the above benefit to support yourself through to age 65.

Do you need it?

Consider the following:

If you have a partner who works, can they assist if you go down to one wage?

You're unlikely to get any government assistance if you're sick and can't work and if you are eligible for a sickness benefit this is a lot less than the average income.

How does your employer handle sick leave? i.e. if it accumulates this is handy if you have built up a healthy balance and could assist if you had an extended period of illness.

If your not covered for a period of time off due to illness the yes you need some protection.

For information on the above or any of the other insurance we offer feel free to give us a call.

October's Property Gazette

Published by Scott Miller on Friday, September 28, 2018 in

Get Ready for the Summer Rush!

As we welcome daylight saving and warmer days, we also begin to see an increase in the number of property listings within the Christchurch market. Vendors are wanting to move and buyers to settle in before Christmas, which results in plenty of fresh listings over the spring and summer months. If you’ve been waiting for the perfect home, chances are it’s recently been or is just about to be listed.

You can expect to be busy chatting with agents and visiting open homes shortly, and we are already receiving plenty of inquiries from both first home buyers and those looking to purchase an investment property, organising their financing. The advantage of having your finance sorted early is that the pressure is off you, and you’re ready to make that offer before someone else does! For a chat on how we can help, give us a call on 0508 466 356 today!

Is a Builder’s Report Necessary?

You’ve found your dream property; it couldn’t be more perfect! While the pressure is on to make an offer which is better than everyone else’s, in both price and conditions, there really is one thing you can’t skimp on. A builder’s report is an absolute necessity and should be listed in the conditions you make when presenting your offer.

As you will be aware, many properties were damaged during the earthquakes and their aftershocks. While major damage is easily spotted, dodgy repairs and structural issues are not so easy to see. Hiring a professional house inspector or registered builder ensures that you find out all the problems and potential problems before you sign on the dotted line. While it’s possible to purchase damaged properties, it’s better to go into the agreement with eyes wide open as to how much repairs will cost, plus identify any potential issues you may need to fix in the future.

Cashbacks – What you need to know.

In the competitive mortgage industry, banks often offer incentives to get your business. One of these incentives is a cashback. A cashback is when a lender gives you back a set amount of money upon your signing up with them. Traditionally this has been advertised as a contribution to your legal costs.

The benefits obviously include the cash you will receive upon completion of the deal. Some lenders also sweeten the deal by including additional bonuses by giving you discounts with their other products.

But don’t forget the Clawback period!!! – Most lenders have a provision that allows them to clawback the cashback given to you if you pay the loan off in full or leave the bank within a 3-year period. This is done on a pro rata basis, so the longer you are with the lender the less the clawback becomes. After 3 years there is no clawback.

If you are at all unsure about whether you should be accepting a cashback or not, give us a call! We’d be happy to help you find the right finance for your unique circumstances, whatever they may be!

Carry on moving, and you're out.

This heading appeared in a newspaper Column I read recently, the article spoke about standing still financially and how this is not usually an option when there are bills to pay.

The analogy comes from the children’s party game “Musical Statues”, in the game when the music stops everyone freezes, carry on moving and you’re out. In reality standing still doesn’t work, when the financial music stops the silence is deafening, you want move but find it difficult to do so.

So how do you stack up if for example if you had to stop work, you lose your job or a contract is not renewed?

Here are some suggestions to enable you to keep on dancing:

  • Keep the main costs the main costs .e.g. rent, food, rates, insurance are some examples.
  • Eliminate unnecessary ongoing costs .e.g. credit card repayments, hire purchase or habit cost tobacco, fast food etc
  • Have an emergency fund to cope with minor cash crunches
  • Have a safety net to spread the risk if you stop work (mortgage or income protection)

Before the music stops make sure your prepared, come and see us we loved to talk with you.

September's Property Gazette

Published by Scott Miller on Saturday, September 01, 2018 in

It’s Time to Cut Thousands Off Your Mortgage Repayments!

Spring is in the air, and there’s great news on the horizon. The Reserve Bank has recently indicated that the current Official Cash Rate of 1.75% will remain unchanged until late 2020. Having had the OCR remaining at this low level since October 2016, borrowers have been enjoying lower interest rates, and many have paid more than the minimum mortgage repayment, capitalising on the RBNZ’s decision.

Interest Rates Have Changed, But Will They Drop Anymore?

In August, the RBNZ said, “The Official Cash Rate (OCR) remains at 1.75%. We expect to keep the OCR at this level through 2019 and into 2020, longer than we projected in our May Statement. The direction of our next OCR move could be up or down.”

This offers borrowers the stability in knowing that in the short term, interest rates are most probably not going to rise in the short-term, but that a future rise is not off the cards.

We’re suggesting to many of our clients that they consider taking advantage of the low one and two year fixed rates. Not only does this give them the stability of a set repayment, but also can let them slightly increase their payment above the minimum repayment amount. Doing so can save you thousands of dollars of interest payments and take years off of your mortgage.

Deciding if you should fix or float, or how long you should fix for, will depend on your personal circumstances. Having a chat with us about your borrowing needs is free. We’re more than happy to help you decide if now is a  good time to break and refix your mortgage, restructure it or simply pick the best-fixed interest period for you.

We can also offer advice on rapid mortgage reduction, helping you save thousands over the period of your loan. Give us a call on 0508 466 356 now or send a message through our website today.

What about Air BNB?

Opening up your home to Airbnb guests can be an amazing experience. But it will only be that way if you:

    • keep good accounting records
    • provide accurate information to the IRD
    • ensure you have sufficient funds on hand to pay your outgoings such as GST, rates, insurance and interest repayments on time.

Lending: Lenders treat the provision of visitor accommodation differently to a long term rental

Rates/Consents: Local councils may impose additional requirements for visitor accommodation for which you may need to register

Insurance: Standard house and/or contents insurance does not cover Airbnb-type rental. Talk with your insurer so you have appropriate and sufficient insurance

The following headline in the NZ Herald on the 27th August highlights an experience you don’t wont:

“ Airbnb Auckland Home Trashed by Aussies on Bledisloe game night”

Even though homes that are dedicated to short term leasing are capable of being insured under Personal Insurance home policy, the potential issues for owners are:

    • Methamphetamine Contamination (the benefit only applies to tenanted homes, or Owner occupied homes where owner is away)
    • Loss of Rent, Malicious Damage or Theft, or Landlord’s Furnishings (the Optional Additional benefit - Landlord’s Extension is only effective for tenanted homes)
    • Fire or explosion following malicious or deliberate acts (standard exclusion is waived only where the person renting, living, staying at the home is a tenant)

EQC may view the occupancy of the home as commercial use and potentially decline a natural disaster loss, meaning the owner will miss out on

Statutory Liability (protection from fines or penalties for unintentional breaches of most laws in New Zealand, there is no cover provided for this under our Home policies).

Talk to us today if we can assist you.

August's Property Gazette

Published by Scott Miller on Tuesday, July 31, 2018 in

We’re Welcoming August with a New Vehicle Finance Product

August is a great month to be purchasing your first home, moving your loan to a new lender and buying a new vehicle!

Introducing Our New Vehicle Finance Product

Winter is not the time you want to have car troubles! Dark, cold and wet, there’s nothing worse than having an unreliable vehicle. We understand that not everyone has the ready cash to purchase a new or used vehicle, which is why we’re adding a vehicle finance product to our services range.

We can assist you with obtaining the required finance to replace your existing vehicle or purchase an additional one. For an expanding business, an expanding family or the expanding number of drivers within your family as they reach 16 years old, let us help you get the vehicle you need.

With competitive pricing for the financing of both new and used vehicles, contact us first!

HomeStart Grant News

The HomeStart grant offers KiwiSaver members who have been contributing for three years a cash grant when purchasing their first home. Administered by Housing New Zealand, to be eligible, you need to:

  • have made the minimum contributions for three years
  • be building or purchasing your first home
  • have a single income of less than $85,000 or double income of $130,000 per household
  • have at least a 10% deposit
  • be planning to live in the house for at least six months after buying it

The HomeStart grant is per dwelling, up to a maximum of $10,000 for the purchase of an existing property, or up to $20,000 for the purchase of a home which is less than six months old, or the land to build one on.

To learn more about how we can help you buy your first home, contact us for a copy of our free 1st Home Buyers Guide today!

Sick of Your Existing Lender?

Are things just not working out with your existing lender? Don’t put up with getting the run-around, poor communication or just plain bad service. We’ll give you some options around the refinancing of your current borrowing with a new lender – one who’ll appreciate you as a customer and an individual! Contact us today for a chat, and we’ll put together a plan to help you move forward.

Trauma Cover Part 2

To recap from last month article lets ask a couple of questions:

What is Trauma Cover?

Trauma Cover is designed to help alleviate the financial impact of a serious health condition, originally conceived by Dr Marius Barnard, the surgeon who performed the first human heart transplant. Barnard argued that, “as a medical doctor, he can repair a man physically, but only insurers can repair a patient’s finances.”

(Trauma cover is basically a dread disease cover, it is not a disability cover it pays out on the diagnosis of a covered condition not the prognosis).

What is its Purpose?

As stated by Dr Barnard “Trauma cover exists to repair a patients finances.”

Trauma Cover Types

  • Essential – fewer conditions with limited definitions covered
  • Comprehensive – more conditions with higher definitions, multiple claims benefit
  • Severity based – pays out when a condition reaches a level of severity
  • Major Trauma – offers a level of cover for more severe conditions

How much cover do you need?

The worst case financial scenario is the true need,  a realistic measure might be as much as you can afford.

You can balance this cover with Income or Mortgage repayment cover and insure the percentage of income not covered by these policies, times this by the years need to age 65.

This may sound like a lot but depending on your circumstances you may need a lot, consider the following:

  • How long will I potentially need cover?
  • What financial protection is realistic for me?
  • What financial reserves do I have at hand at short notice?
  • What other cover do I have?
  • What other commitments (family or business) do I have?

To find out what cover is best for you contact me on 03 662 9058.

 

Kind regards

Scott, Shane and Jo

Advanced Mortgage and Insurance Solutions


Contact us to get free personal mortgage and home loan advice








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