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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 02, 2018 in

 First Home Buyers Seminar

Help Has Arrived!

This April, if you’re a first home buyer, luck is in your favour! On Wednesday 4th April 2018, we’re holding a first home buyers seminar in conjunction with several other leading players in the industry. In our 75-minute presentation, you will learn about the:

o             Legal matters of buying a home

o             Sale and purchase agreements

o             Ownership structures

o             Relationship Property agreements

o             KiwiSaver and Homestart applications

o             The Kannangara Thomson point of difference

o             Lending matters of buying a home

o             Welcome Home Loan

o             Deposits options

o             New build deposit information

o             Why use a mortgage broker - what banks look for in an application

o             Buying matters

o             Making a offer

o             Type of sale

o             Vendors perspective

o             Agents jargon

o             Building matters

o             Building process

o             Choosing the right team for your build project

At our April first home buyers seminar, you will hear from these industry experts:

o             Brent Selwyn from Kannangara Thomson – Legal matters

o             Emma van der Kley from Kannangara Thomson – Legal matters

o             Wathsala Ponnamperuma from Kannangara Thomson – Legal matters

o             Scott Miller of Advantage Mortgage Solutions – Lending matters

o             Matt Ingold – Real Estate

o             Nic Davis – Real Estate

o             Miranda Knapton of Blue Summit Construction – Building matters

To secure your spot, please book at the Eventbrite website. If you have any questions, please email Scott at scott@amsnz.co.nz today. Be quick – only 50 spots are available. We are meeting at Hilton’s Winery – 750A Wairakei Road, Christchurch from 6pm-7:30pm.

Now More Than Ever You Need a Mortgage Broker! 

It’s now more important than ever to use a mortgage broker to help you secure your dream property. In our busy lives, time is a commodity most of us could do with more of! Your mortgage broker will do the hard work for you, contacting lenders on your behalf to obtain the best loan for you. Knowing this means you can concentrate on finding your dream home, not the mortgage for it.

A mortgage broker also can help you with obtaining pre-approved finance. In today’s property market, homes are selling quickly, and you need to act fast. Knowing how much you can borrow lets you make an offer with confidence to a seller, showing you are serious and increasing the likelihood of your offer being accepted.

6 Reasons to Review Your Insurance

1. Your Income Changed

Whether you got a new job or you lost one, it’s a perfect opportunity to do a review of your life insurance.

You may be missing out on substantial benefits so review your cover when your income changes.

2. Your Health Changed

This is an important one! Let’s say you’ve been working out and eating healthy and as a result your blood pressure went down – congratulations, this may also affect your life insurance rates!

Companies generally will reward you if you are in great health by offering you discounted premiums. You may want to call your insurance company and ask what kind of rates you’d get for a preferred health discount.

The discounts in many cases can be very substantial!

So, review your life insurance when your health changes – it’s a good idea!

3. You Lost Weight

This is related to health, but different enough to make a distinction. Let’s say you’ve been playin’ Wii Fit for the last five months and you joined the Biggest Loser fan club – as a result you’ve lost some weight!

Guess what, you may now qualify for preferred discounts!

You should get a new life insurance quote or give your company or a call to find out what kind of discounts are offered for their preferred rates.

4. Your Family Status Changed

If you are expecting a child, you will soon begin to feel enormous pressure to provide for your little tyke. If you already have kids you know what I’m talking about.

It’s extremely important to sit down and ask tough questions like, “What happens if I die and my wife is left with the kids?” You may also ask, “Who will provide for my kids if I pass away?”

5. Your Housing Status Changed

Maybe you just paid off your mortgage and you don’t feel like you need that much life insurance anymore.

Or, perhaps you just bought your first home and now you gave a liability that would need to be paid upon your passing.

Review your life insurance when your housing status changes – you may need more or less life insurance, but at the very least ask good questions about your needs.

6. Your Marital Status Changed

Congratulations! You just got married – now review your life insurance! You now have a spouse, someone who may be dependent on you – it’s important to review how much life insurance you need.

On the flip side, unfortunately people get divorced very often these days and so your life insurance needs may change as a result also. Maybe you don’t need that much coverage anymore.

Contact us today for a chat about how we can help you secure the property of your dreams – and remember to book your spot at our April first home buyers seminar too!

November's Property Gazette

Published by Scott Miller on Wednesday, November 02, 2016 in

Which is better? A bank or a broker?

Should You Choose a Bank or a Mortgage Broker?

How do you choose between working with a mortgage broker or a bank when it comes to your home loan? Does one have an advantage over the other? Who is more likely to get you approved for your loan? We believe it a mortgage broker and here is why…

Working with a Mortgage Broker

A mortgage broker works for you and not a bank. A mortgage broker works towards getting you the best home loan for your individual needs. They’ll do all the work for you, approaching the banks and other lending institutions on your behalf, hunting for the best deal possible. 

A mortgage broker specialises in their area. They know about which lenders offer which packages and how to get a mortgage if you have a low deposit or poor credit rating. You also don’t need to pay a broker for obtaining a loan for you, that comes from the bank! So, you end up saving time and money just by working with a mortgage broker.

Working with a Bank

It would be considered the traditional way of securing a mortgage, however things are changing. Approaching a bank directly is not the best way of getting a home loan nowadays. In fact, it is often more than one bank you’ll need to meet with and who has time to talk to all the banks?

Work with Advanced Mortgage Solutions

We’re mortgage brokers. We work for you, not for a bank. Our team of brokers have access to hundreds of products and dozens of lenders. This allows us to find the best possible fit for you. A mortgage is not only a sharp interest rate – the structure of the loan, allowing extra repayments with no penalty, or having a loan structure that best protects you from increases in interest rates are the way to go. Contact us today and let us make things easy for you by arranging your next home loan.

Insurance

We all need it, and we can all benefit from having expert advice.

Like mortgage brokers, insurance brokers are here to help you, and like mortgage brokers they have access to hundreds of products and dozens of insurance companies.

How much do we need? What are the best products for our situation? Are we paying too much for our existing cover... it can be very complicated!

That’s why we are now offering all of our clients the opportunity to get the right cover at the right price via our In-House Insurance Adviser, Jason Haskins

With more than 25 years in the Finance industry, including at Senior levels both Overseas and in New Zealand, Jason is very skilled at understanding what is important to the clients he meets, and is able to save you both time & costs.

For several years Jason was also responsible for training new financial advisers across New Zealand, and is able to give you advice on all aspects of Insurance.

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

March's Property Gazette

Published by Scott Miller on Monday, March 07, 2016 in

Thinking of building? Look into your finance options carefully

You may be wowed by builders’ 5% deposit options, which is common in the market place. However it is slightly misleading. Although they (the building company) may only require a 5% deposit you will be highly unlikely to secure finance for only 5% especially on a build. Ask yourself the question where is the shortfall coming from?

In reality you will likely need between 10 – 20% deposit depending on your situation. We recommend talking to us before you begin looking for builders so you are armed with a pre-approval from the lender and know what your budget is for the build.

Working out your finance options

When you build, your home loan is approved for the full amount, but you draw it down in instalments as the building work progresses.

Therefore, it is essential to get a fixed priced contract which sets out a progress payment schedule.

Building is a very exciting process when armed with the right information and realistic expectations on not only what you can borrow but the whole build process.

Advanced Mortgage Solutions have helped hundreds of people secure the finance to build their new home, call us today to find out how we can help you.

April's Property Gazette

Published by Scott Miller on Wednesday, April 01, 2015 in

As of today (1st April) changes to the KiwiSaver first home buyer packages come into effect. The KiwiSaver First Home Deposit Subsidy has been replaced with a KiwiSaver Home Start Grant. 

Put simply eligible first time homebuyers will now be able to withdraw all of their KiwiSaver savings except the $1,000 kick-start from the government. 

There will also be greater alignment with the KiwiSaver Home Start Grant and Welcome Home Loans for house price caps. The table attached shows the changes.  

 For more detailed information please click here to go through to the Advanced Mortgage Solution Website. 

If you want to talk to us about how we can help first time home buyers, give us a call on 0508 466 356.

March's Property Gazette

Published by Scott Miller on Thursday, March 19, 2015 in

People – there is a war out there! A war on lending.  

You may have seen the headlines SBS bank have a ridiculously low fee of 4.99% fixed for five-years. The advertising was a bit ambiguous, stating that you had to be an existing customer of SBS however, this is not the case. At Advanced Mortgage Brokers we can access this deal for you but we have been told by SBS that this rate will be available for a very limited time. If you would like to take advantage of this rate you will be expected to have your transactional accounts with SBS and place your income into this account.

If you want to talk to us about your options, give us a call sooner rather than later. 0508 466 356. 

Floating Rates to remain static 

We are pleased to see that there is currently no movement towards increasing floating rates this year. BNZ Economist Tony Alexander states: 

“The cash rate is likely to remain at 3.5% all this year thus your floating rate borrowing costs won’t change. Next year is a bit different. We suspect that the Reserve Bank will move the cash rate up from 3.5% to 4.00%. But the risk well worth backing is that they do absolutely nothing so you might see no change in your short-term borrowing costs both this year and next.” 

This is good news but with floating rates the risk is always there that they will rise. If you haven’t looked at the structure of your home loans in a while, feel free to contact us we are always happy to have a look at your setup and advise accordingly. 

Tips on buying your first home 

Advanced Mortgage Solutions with the help of Sorted.org.nz will set out some tips to get you on track for buying your first home. 

There is no getting away from it, you will need to save a deposit to buy your first home. Depending on deposit total (by accessing your savings, KiwiSaver, and the First Home Buyers Subsidy), there are many different options available to first home buyers. 

Generally lenders do require 20% deposit, however there are exceptions to every rule such as the Welcome Home Loan. The Welcome Home Loan only requires 10% deposit and you can get help securing this deposit through KiwiSaver withdrawals or gifted by a relative. There are some rules applicants need to be aware of when trying to use the Welcome Home Loan product, so please don’t hesitate to pick the phone and have a chat with us about the process. 

There are also some positive changes to the Welcome Home Loan product that take effect after the 1st of April. We have a first home buyer’s guide that shows a step by step plan on buying your first home. This along with our experience will see you sail through the minefields of obstacles of buying your first home. 

Get into a habit of budgeting and not only will you get into your home much quicker, you’ll find repaying your home loan and covering all of your outgoings a lot less stressful. We also have a number of existing ways of structuring your home loan, enabling you to pay off your mortgage faster and save thousands of dollars in the process.

November's Property Gazette

Published by Scott Miller on Thursday, November 13, 2014 in

What you need to know about low deposit loans

With Wednesday’s announcement that Reserve Bank restrictions in regard to loans for those with less than a 20% deposit staying for now, with no changes to policy surrounding this, no doubt there are many thinking home ownership will always be out of reach.

Don’t be totally despondent though as there are options and solutions that may work for you. Banks review their appetite for low deposit lending regularly, particularly around surplus income required to meet their criteria for borrowers in this space. Where you could be declined one month, the next could see an approval based on the banks percentage of loans written and whether that figure is over or under the allowed percentages stipulated by the Reserve Bank.

The competition for borrowers with a 20% deposit is still fierce, and although this may seem unfair to those of you struggling to even get on the property ladder, it actually enhances your chance of financing a home with less than a 20% deposit, as every loan written in the “greater than 20 % deposit” space releases 10% of that loan amount to the pool for low “less than 20% deposit” lenders.

Take it that Mr Smith with a 20% deposit is settling a  $500,000.00 loan this week, that means the low deposit pool now has $50,000.00 available to lend to those who meet the criteria. Some weeks we have seen banks with no funds to lend in this space, so this means that even though there is demand, there is no supply and therefore a decline may not need to be seen so personally as a reflection of your characteristics. It may simply be that there are no funds available and trying again may be the thing to do.

Although this news may not make life less complicated for low deposit borrowers, we need to re-iterate that a large percentage of the clients we are helping are still First Home Buyers, Banks are lending above 80%,  and there are options and solutions around moving forward. In the hope of restoring confidence we have below listed some top tips for sourcing finance and preparing for borrowing in this space.

    • See a Registered Financial Advisor (us) as we have up to date market information, specialise in Home Loans, save you time sitting with all of the lenders and money given discounts we can get, and give direction
    • Operate your accounts well. Keep them within their limits, and avoid dishonours and unarranged overdraft fees
    • Save regularly into an account you don’t touch. If you are saving for separate purposes, have different accounts for each purpose
    • Minimise short term debt. Ask us for advice around whether to repay and reduce your outgoings or leave it in place and therefore have more deposit. One size does not fit all
    • Show stability in your place of work and residence. Moving around a lot, although sometimes unavoidable in Christchurch currently doesn’t give the bank confidence in finding you if things go wrong
    • Sign up for Kiwisaver and enrol your kids. There are First Home options and benefits for being a member. Ask us how and what
    • Ask for advice from us  in regard to support from family. There are guarantee and surety loan options available to those who have family willing to assist

As always it’s better to know how you can get there if it it’s not right now, and as always we are here to help.

The property market has certainly picked up over spring, however there is a lot of comment around the LVR restrictions imposed by the Reserve Bank in October 2013, and its effectiveness in dampening the market.

The LVR restrictions imposed were designed to slow the market and reduce the exposure of first home buyers if the market was to fall.  In September 2013, 80% + LVR lending accounted for 25% of all lending, and this was expected to climb.  The restrictions meant that 80% + LVR lending could not exceed 10% of a lender’s total loans.  The result is that 80% + LVR lending is now running at 8.4% of total lending.

As a result of the restrictions, those most affected were first home buyers who had trouble raising sufficient deposit to enter the market.  This in turn opened the door to property investors as there was less competition for homes in the lower price ranges.  Property investors were able to increase their portfolios at the expense of first home buyers.

In the meantime property values have continued to rise bringing into question the Reserve Bank’s decision to impose LVR restrictions.  However there has until now been a cooling of the market in relation to new listings that may be due to restrictions in the LVR.

If the LVR restrictions were to continue, this would further exacerbate the plight of first home buyers who have been shut out of the market.  Young couples without sufficient deposits would be facing a lifetime of renting, which was not the original intention.  Alternatively both lenders and borrowers have become more creative in structuring loans around security offered by generous parents.

There is speculation that the lending restrictions will be relaxed and this is the subject of a select committee hearing to be heard on 11 November.

The general feeling in the market is that the LVR restrictions have not had the desired impact, and that market forces will create a more level playing field in future.  Markets adapt and we are seeing development on the fringe of our larger cities, like the new builds in Pokeno south of the Bombay Hill.  We may see a growing trend of the baby boomers cashing up and moving to the provinces.  This could ultimately stabilize prices as more properties come to market for this reason.

We are seeing the resurrection of some less desirable areas as people focus on value for money and quality of housing stock.  Ex state housing areas offer solid homes in handy areas.  In Pomare in the Hutt Valley complete blocks of state housing have been demolished to make way for new builds at competitive prices. 

Those returning from overseas or migrating to New Zealand will always create a demand for property in areas of high employment.

It is, as always, a question of supply and demand.  This over time will have a levelling effect, and is an effective way in self-regulating the market, rather than Reserve Bank intervention. 


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