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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.

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'r Property Gazette

Published by Scott Miller on Tuesday, October 03, 2017 in

How will the election affect interest rates?

Which parties will make up our new Government? It’s the question on everyone’s lips and the party leaders don’t seem to be giving anything away. The uncertainty has certainly put a stop to many people making large decisions until a new Government has been formed. But how will it affect interest rates?

Should We Be Concerned About Interest Rates?

We don’t think so. Our option at Advanced Mortgage Solutions is that we don’t think interest rates will be changed much by the result. This is because the NZ currency is remaining quite stable.

This is echoed through the Interest.co.nz website where they said, “In the very short-term until 7 October at least, whilst we have a political impasse/vacuum in New Zealand the Kiwi dollar should remain stable. Once it becomes clear with whom New Zealand First leader, Winston Peters decides to negotiate with first and the outcomes from the policy horse-trading that goes with such post MMP election shenanigans, the Kiwi dollar could go either way depending on what type of government we end up with.”

Bernard Hickey published his opinion about interest rate changes the weekend before the election. His comment was that he does not feel interest rates will rise in the short term, even though the National Party believed they would. The NZ Reserve Bank itself has only forecasted one 25 basis point hike by late 2020 and foreign investors don’t seem to be concerned either.

Get Your Free Interest Rate Review

Everyone likes saving money. We would love you to take the opportunity to have a free interest rate review with our team here at Advanced Mortgage Solutions. Click here to visit our website and book in your time for a chat with us.

September's Property Gazette

Published by Scott Miller on Friday, September 01, 2017 in

How to Avoid Paying Extra Mortgage Fees

Interest rates remain low and the Reserve Bank has recently indicated they do not see them rising soon. While this remains great news for new and existing mortgage holders, there is one small catch…

Banks Are Receiving Lower Margins on Interest Repayments

Banks lend borrowers money to make a profit. No one disputes this, and there’s nothing wrong with it. After all, when we take out a mortgage, we borrow someone else’s money to buy a property. In return, we give them money back in the form of repayments and interest. In the past, this has been perfectly okay with the banks as margins between what they purchase the funds for, and then sell them for has been reasonably profitable. They have taken our interest payments as a profit and been satisfied.

Nowadays the problem is that as the interest rates are so low, the banks are not making as much margin as they would like to. They can’t raise their own interest rates as that would make them less competitive, reducing the number of new borrowers they attract. So instead, they have been reintroducing the ability of charging a fee to new borrowers when they take out a mortgage, or a restructure fee for existing clients looking to change their existing loan structures.

With a fee ranging from several hundred dollars up to a thousand dollars, it’s something borrowers have accepted as part of getting a mortgage. We disagree.

Don’t Pay Extra Fees. Here’s How …

As mortgage brokers, we know the ins and outs of all the lending products on the market. We know which banks charge mortgage establishment fees and which don’t. Before you talk with the bank, talk with us first! It won’t cost you anything – we work for free for you!

If you are not quite sure about the differences between a bank and a broker, then check out our blog and find out which one is best!  Remember, we’re not here to make money from you …

Give us a call on 0508 466 356 or fill in our Contact Page form today.

First Home Buyers Seminar


At the start of August, we were pleased to run a First Home Buyers Seminar in conjunction with Brent Selwyn from Kannangara Thomson, and Kyle Pitman from Harcourts Grenadier. We had a full house of eager first home buyers, armed with plenty of questions around conveyancing, Kiwisaver, and deposit amounts. A big thank you to all who attended and helped make the night a huge success.


Our next First Home Buyers Seminar is being held on the 25th of October. Look out for more details on how to book or reply to this email for more information.


February's Property Gazette

Published by Scott Miller on Friday, January 27, 2017 in

How did it get to be February already?


Welcome to 2017, a year we are hopeful will be even better for you and your family! Whether you are buying your first property, an investment property or planning some renovations during the year, we are here to help you with all your mortgage needs. We’ll take the legwork out of finding the right mortgage solution for you, with our friendly service and jargon free advice.

Interest Rates Are on the Rise

We’re already seeing rising interest rates, with many banks increasing their fixed rates over the last few days. This goes on top of the rises towards the end of December, which now see banks offering fixed term rates higher than 5%.

Even though they are large lenders, most banks are unable or unwilling to negotiate on interest rates with their customers on an individual basis. However, they are more willing to provide competitive interest rates to the clients of mortgage brokers. As our client, we will negotiate on your behalf to achieve the lowest possible interest rates for your mortgage. Talk with us today and we’ll hunt out the most competitive interest rates for you.

10% Deposit for First Home Buyers

First home buyers are now able to purchase a property to live in with as little as 10% deposit. We work with lenders who participate in the Welcome Home Loan scheme to help you purchase your first home. As well as finding you the most suitable home loan for your circumstances, we can also help you with your loan application process. If you are considering applying with or are ready to purchase your first home, head over to our Welcome Home Loan information page to find out about the eligibility criteria and how much you can borrow. We also offer a free 1st Home Buyers Guide, so please get in touch and we’ll walk you through the application process.

Life Insurance – are you sorted for 2017?

Life Insurance is the cornerstone of a strong risk protection plan – nearly everyone needs it, and there is more to it than you may think.

Did you know for example that a good life insurance policy will pay out immediately after diagnosis of a terminal illness?

Did you also know that an increasing number of New Zealanders are using their life insurance pay outs to fund alternative therapies and treatments as well as to repay debt, travel and leave funds for their loved ones?

There are many benefits to having a discussion with us about Life Insurance, including that we work with the main Insurers to get you the top independently rated Insurance. We work to provide solutions at the best prices as well as giving you good advice.

If you have Insurance already we may be able to save you money on your premiums, and if you don’t have Insurance we can certainly help you identify how much you may need and what the best cover is for you.

Get in touch with us to make sure that your Life Insurance is something you won’t have to worry about in 2017.

To find more info, head over to our Life Insurance page, or contact our in-house Insurance Specialist Jason Haskins on 022 0189 178 or jason@aisnz.co.nz

We look forward to working with you over the coming months of 2017.

Scott, Jason and Jo

Mortgage Holiday packages and updated Insurance information

Published by Scott Miller on Friday, November 18, 2016 in

Updates to House Insurance and Mortgage Holidays in the South Island and lower North Island.

 

      Mortgages:

Lenders have now come forward with their assistant packages for those caught up in the recent earthquake events in and around the lower North Island and Upper South Island.

These assistance packages include mortgage holidays, which allows exiting clients to put a temporary hold on their mortgage repayments. Also available are temporary overdraft facilities to help individuals and business with cashflow. Although handy there are some things that people looking to complete this should be aware of.

Mortgage Holiday - The interest that would normally be charged is capitalised and added to your mortgage balance. This means at the end of the mortgage holiday period, the money you owe the bank has increased.

Overdraft facilities - These initially will have no to low interest components, however they will need to be paid back, so it pays to keep an eye on your spending if using one of these facilities.

NB: Please note these facilities are only available to those in the affected areas and is not available as a matter of course to those outside the affected areas.

Insurance:

I just wanted to give you a quick update on the Domestic Insurance front, following this week’s events.

The Insurance situation today is best described as ‘Cautiously Optimistic’, as Insurance companies are now allowing existing policies on homes to be transferred to the new purchasers.

Although the embargo for new  Insurance policies remains in force, this is an encouraging sign.  We are hopeful that the insurance market for greater Christchurch will be unlocked in the near future enabling new policies to be approved and issued.

As ever, please don’t hesitate to contact me for any assistance or advice.  

Call Scott on 021 343 648, or email scott@amsnz.co.nz 

Call Jason on 021 018 9178, or email jason@aisnz.co.nz

If you would like to discuss anything about Mortgages or Insurance, contact one of our friendly Mortgage Brokers today. Remember, we work for you and our services are always free.

Important updates relating to "House Insurance" in the South Island and lower North Island.

Published by Scott Miller on Tuesday, November 15, 2016 in

Important updates relating to "House Insurance" in the South Island and lower North Island.

I thought it would be a good idea to provide an update on the domestic insurance situation, following the large earthquakes earlier this week.

At this point, there is an embargo in place on new domestic insurance applications across our region. This applies to new house, contents, vehicle & boat applications and applications that have been approved but are not yet in place.

Please note that existing policies that are in place are unaffected and remain in force.

This embargo is expected to remain in force for the next few days while the risk assessment is completed. After this time we are hopeful that things in greater Christchurch at least will revert back to normal.

Because the domestic insurance market is temporarily locked it is paramount that existing policy holders do not let their cover lapse, so if you are a home owner please make sure of this.

For new home purchasers, we are confident that these restrictions will soon pass provided nothing further occurs locally.

All other insurance cover remains unaffected – in fact this is a great time to make sure your "Life & Mortgage Protection" cover is in place and that you have the right protection at the best possible price.

Please feel free to contact me if you have any questions at all or if I can be of any assistance.

Call Jason on 021 018 9178, or email jason@aisnz.co.nz

September's Property Gazette

Published by Scott Miller on Friday, September 02, 2016 in

Understanding New Loan to Value Ratio Changes

Recently the Reserve Bank (RBNZ) has tweaked NZ’s Loan to Value Ratio in an effort to stop rising property prices. As a result, they have set in motion a few new directives for banks which are compulsory from 1st September 2016. Other lending institutions such as credit unions are not affected.

Loan to Value Ratios and What They Mean

Loan to Value Ratio or LVR, is the percentage of money a bank will lend based upon the value of the residential property. A high VLR is being discouraged by the RBNZ for both owner-occupied and investment properties, in an effort to slow the housing market. That means:

·         Only 10% of the bank’s residential mortgage lending for owner-occupied properties within NZ, are allowed to have an LVR greater than 80%. This means that a deposit of at least 20% is required by the majority of buyers.

·         Only 5% of a bank’s lending for investment properties within NZ can have an LVR above 60%. This means investors now need to have at least a 40% deposit to buy a new residential property.

There are some exemptions to the LVR changes, where a lender may allow a higher LVR for a property, including the construction of a new property or a short term bridging loan. We are more than happy to chat with you and see if your plans qualify for an LVR exemption.

Get a Low Deposit Home with a Mortgage Broker

One of the key advantages of using a Mortgage Broker is that we are not a bank. We don’t make decisions about who can or can’t have a mortgage. Rather, we work for you and help you to get the right mortgage for your situation and often at a lower than advertised rate. This is also true for buyers who have less than the required 20% or 40% deposit to buy a home.

As we work with banks and other lenders every day, we know which ones are willing to lend on lower deposits and which aren’t. We approach those lenders on your behalf and explain why your mortgage should be approved. Occasionally a high LVR loan adds a low equity premium or low deposit insurance to your mortgage. If this is the case, we may also be able to negotiate a lower rate for you.

Finally, we are also able to help you get your foot on the property ladder with a low deposit home loan if you meet criteria for either the Welcome Home Loan, First Home Buyers Subsidy or use savings from your Kiwi Saver. You can find out more about the assistance for owner-occupied buyers with less than 20% deposit here. We also have a free First Home Buyers guide, which is proving exceptionally popular with our clients.

If you would like to discuss how the LVR changes affect you, or start applying for a new mortgage, contact one of our friendly Mortgage Brokers today. Remember, we work for you and our services are always free.


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