mortgage brokers christchurch

Talk to us for FREE Personal Mortgage & Home Loan Advice

0508-466-356

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.

May's Property Gazette

Published by Scott Miller on Tuesday, May 01, 2018 in

We’re Predicting Housing Market Stability!

There’s no need to man the lifeboats and start paddling away from your dream of home ownership just yet. Nor do you need to be concerned with rising interest rates. In this month’s newsletter we discuss our Official Cash Rate predictions, the benefits of a well-structured home loan and using line of credit facilities.

Stability in Official Cash Rate Likely till November 2019

The Official Cash Rate set by the Reserve Bank has been at 1.75% since November 2016 and looks set to stay there until at least November 2019. The RBNZ governor signalled that while GDP was weaker than expected in the fourth quarter, industry growth was expected to continue to strengthen. They see the CPI inflation to rise upwards, with long-term expectations sitting around 2%.

Therefore, if you have a floating interest rate, there’s no immediate need to fix your mortgage. However, if you prefer certainty, chat with us about finding you a great low fixed interest rate for your loan.

Why a Good Loan Structure Wins Every Time

The way your home loan is structured can either save or cost you thousands. Fixed, partially fixed, floating or revolving, there are plenty of ways to structure your home loan. While it’s believed that a low interest rate is what’s important, we don’t believe it’s the most important consideration. After all, borrowers cannot control the interest rates and are subject to whatever the lenders offer us.

However, what you can control is the structure of your home loan. For instance, channelling your savings and income into your mortgage can save you a heap on interest. If you owe $450,000 in your mortgage account, but have your income (say $2500) paid directly into it, then you are paying interest only on the $447,500. You can also shrink your interest repayments by even slightly paying more than the minimum repayment amount each fortnight too.

Give us a call and let us so our magic with your home loan structure to save you some money!

Should You Use Line of Credit Facilities?

A line of credit home loan, also called a revolving credit mortgage, is an approved credit limit which has been set in advance. It uses a floating interest rate and the aim is for you to decrease the amount of interest you pay by having all your savings and income directly paid into that account. You can draw from that account though and that is where it can become a problem.

Line of credit facilities are great if you are disciplined and deliberately continue to lower the debt balance each month in your account. In this way you will continue to lower your interest payments, saving you money. However, what many borrowers do is see it as a bank account from which they can withdraw money up to their credit limit each time. They still end up paying interest but fail to reduce the principal and grow their property equity.

If you are unsure if a line of credit will work for you, have a chat with us. We can talk through the pros and cons in detail with you. Book a time with us now and we’ll even see if we can get a discounted rate for you too!

HAVE YOU CONSIDERED TRAUMA COVER?

Becoming temporarily disabled has the highest percentage for keeping people out of work than and other event 27%, the following is some interesting research that has been done on Trauma Cover. The research covered information in China, Hong Kong, Malaysia, Singapore & Australia

Here are some interesting facts and figures:

  • The first Trauma policy was sold in South Africa in October 1983 by Crusader Life and only covered heart attack, cancer, stroke and coronary artery by-pass surgery (now up to 50 events)

  • Females purchased more Trauma policies than males, with the exception of Australia

  • Female Trauma Claims – Cancer makes up more than 80% of claims in every market, with Breast Cancer the most common type, 32% of cancers in China & 61% in Australia

  • Stroke was the second most common reason for a Trauma Claim, with China having a higher claim rate than the other areas.

  • For males, Cancer was leading cause of claim, with Prostate Cancer accounting for 37% of all cancer claims, followed by claims for a Heart Attack

 

Here are the facts about Trauma Cover:

  • Trauma Protection pays a lump sum cash payment that you choose how to use. With Trauma cover in place you won’t need to rely on government health and compensation schemes alone.

  • You can use your payment for anything you choose, such as covering costs of extra medical treatment, home help, or mortgage repayments.

  • Pays out the full Trauma Cover if the insured person requires life-support treatment for three or more days OR requires intensive care treatment for five or more days regardless of whether or not the trauma they suffer is a covered condition

  • Children get up to $50k of free trauma cover. They can also get additional paid for cover from 3 months to a max of $200k with the only exclusion being congenital defects

December's Property Gazette

Published by Scott Miller on Monday, December 04, 2017 in

Happy Holidays from All of Us!

December has arrived, and the Christmas holidays are now on the radar. With the warmer days, the Advanced Mortgage Solutions team are looking forward to spending time with our families and loved ones over the Christmas break. Our office will be closed from the 22nd December to the 8th January and we are looking forward to helping our clients achieve their property dreams in 2018.

We Welcome Shane Blummont to the Team

We’d like to take the opportunity to welcome Shane Blummont to the Advanced Mortgage Solutions team. Shane is our new Insurance Broker and with over 30 years in the industry, we’re thrilled he’s jumped on board with us.

Shane’s expertise is with life, trauma, income protection, fire and general insurance. He also has experience working for some of the country’s large insurance companies and providing insurance advise in a banking context.

Shane would love to have a chat with you about you and your family’s insurance needs and help provide you with the insurance solutions which best suit your needs. Give Shane a call on 03 662 9058 or send him an email at shane@aisnz.co.nz to book a time for a chat.

Loan to Value Ratio Restrictions Are Easing

The Reserve Bank has announced an easing of the loan to value ratios from January 2018. Currently banks are only able to have 10% of their lending allocated to buyers with less than a 20% deposit. This is being raised to 15% for first home buyers who have less than a 20% deposit.

That is great news for first home buyers and if you’re one, you need to contact us today! We’ll work with you to find the right loan to suit your circumstances and help you get the home of your dreams. Head to our website now for more information on how we can help you into your first home.

From all of us here at Advanced Mortgage Solutions, we wish everyone a very Merry Christmas and a happy and safe New Year.

November's Property Gazette

Published by Scott Miller on Thursday, November 09, 2017 in

Should we expect property changes from Labour?

The new Labour, Greens and New Zealand First government is up and running. Should we be worried about the changes they will implement regarding property? Or will the changes go in our favour?

Since taking office, the new government has already laid out some policy changes around property, including:

  • Restricting ownership to foreign buyers
  • Not introducing a capital gains tax to land or building of the family home
  • Fast tracking of the Healthy Homes Guarantee Bill
  • Removal of negative gearing
  • Extension to five years of the bright line test
  • Changes to rental property agreements, geared at helping tenants, not landlords

So far property statistics have shown both buyers are sellers are not too concerned with the policy changes. Sales for October were only slightly down and while house prices have dropped in some areas, there is currently not enough information to predict what will happen.

If you’re concerned regarding your home or proposed purchase, come and talk with us. We’ll discuss with you any potential issues you’ll need to be aware of and tailor a plan which will suit your circumstances perfectly!

Vodafone is Changing! Have You Updated Us?

If you currently have a Vodafone run email address, it’s going to change. This is because they are no longer supporting their email service from 30 November 2017 due to ongoing issues with it. If you have one of these email addresses, please tell us your new address so you can continue to hear from us:

  • vodafone.co.nz
  • vodafone.net.nz
  • ihug.co.nz
  • wave.co.nz
  • quik.co.nz
  • pcconnect.co.nz
  • paradise.net.nz
  • clear.net.nz
  • es.co.nz

In the build up to Christmas, things can get hectic! At Advanced Mortgage Solutions, things are humming along, but we still have time for you! Drop in to see us – we’d love to chat with you over a cuppa!

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.


March's Property Gazette

Published by Scott Miller on Thursday, March 02, 2017 in

What’s up with rising interest rates?


As we begin to welcome the cooler weather during March, we are also starting to see higher interest rates creep into the market. This has happened even though the Reserve Bank has kept the Official Cash Rate unchanged. This year alone interest rates have gone up 5 times and although in small amounts, we are now seeing the 5 year interest rate up around .75% from their lows.

Why Are Interest Rates Rising?

Economists have stated that the Reserve Bank’s stance on requiring a 40% deposit for investors, as well as a general 20% deposit for owner-occupier home buyers, is the reason why the housing market is slowing down in some areas. Banks are also struggling to attract deposits from New Zealanders. This resulted in a monthly drop in bank deposits for the first time in three years. Thus, banks have had to head overseas for more funding to be able to continue to offer their borrowers money. This had led to borrowers being charged higher interest rates.

There is hope on the horizon however. As mortgage brokers, we can approach lending agencies on your behalf to get the best interest rates for your unique circumstances. It is this bargaining power we have which sees our clients getting lower rates when borrowing, compared to borrowers who approach banks directly.

You can find out more about the five ways we help you get the best interest rates for your home loan here. You’ll be amazed at how easy and quick it really is when you work with us!

Looking to Purchase Your First Home?

The Welcome Home Loan package is well known amongst first home buyers. But is it really that good? The problem is that it has been designed as a one-size-fits-all kind of package and as we know, that doesn’t work for everyone.

Here at Advanced Mortgage Solutions, we don’t use a cookie cutter approach with our clients. Instead we work with you to obtain the best borrowing rates and offers from multiple banks and lending institutions on your behalf.  We’ve created a free guide for first home buyers and this explains how you can buy a home with just a 10% deposit. We can also help you with alternative products to the Welcome Home Loan or help you with this loan package if it proves the best deal for you.

Who owns your Insurance?

Recently, two separate events have highlighted the importance of not just having the right insurance, but making certain the money gets to the right people when the worst happens.

In the first situation, a separated policy owner was critically injured, but his policy was still owned by his ex-partner, leading to a complicated & fractious situation as it was his ex-partner who was the recipient of the Trauma policy pay out and was the only person legally able to make the claim.

In the second case a divorced woman was also critically injured, and had recently removed her ex-husband from her policy. However, she had also gone a step further and instructed her lawyer to prepare a Power of Attorney document naming a relative as being able to act for her in the event she was incapacitated.

Unfortunately, she was badly injured in a car accident. Had she not appointed a Power of Attorney, it would have been very difficult for her to make a claim and receive a payment due to her incapacitation, which her relative was able to do for her to help financially with her long recovery process.

So – with Insurance, having it is crucial, but so is getting the right advice around ownership so that the money gets to the right hands when it’s needed.

As Autumn brings with it a slight change in the weather, we continue to look forward to helping you achieve your homeownership dreams.

Kind regards

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.

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.

February's Property Gazette

Published by Scott Miller on Thursday, January 28, 2016 in

Interest rate outlook for 2016

We are hearing murmurings that the Official Cash Rate (OCR) is set to drop again during the second half of 2016, possibly taking it to a new low of 2%. This will put pressure on banks to reduce floating and short-term fixed mortgage rates. With this in mind we want to make sure you are in a position to take advantage of these reductions.

Although the one to two-year fixed rates are the cheapest rates at most main banks right now, around 1% below the floating rate, they may be a little too long to take advantage of the forecasted reductions in the OCR. So borrowers can create some certainty, and obtain a lower rate by fixing for short terms rather than floating. If the RBNZ cuts rates further this year, there is some scope for floating and some short-term rates to be lower later this year. However, if the RBNZ does not cut interest rates further short term rates may rise from these levels.

When choosing a mortgage, it’s not just about finding the cheapest rate. To ensure you are getting the best out of your mortgage it is wise to have a mixture of all the options available from NZ lenders. One characteristic of a floating mortgage is borrowers can enjoy a certain amount of flexibility with the loans repayments, allowing for a minimum monthly repayment or a larger repayment if you are having a goods month. Splitting the mortgage into different terms, or a mix of fixed and floating mortgages, are strategies that allow some flexibility while locking in some interest rate certainty.

With the downward trend of interest rates we are getting a lot of enquiries about breaking loans. Many customers believe they can save money by breaking their existing loans, unfortunately in our experience this is seldom the case. We urge you, your friends and family to contact us first before looking to break any of your existing home loans, so we can negotiate with the lenders before making a decision.

For more information, contact us today.

 

August's Property Gazette

Published by Scott Miller on Monday, August 03, 2015 in

To break or not to break…

There has been a lot of media attention on interest rates lately, with another cut in the Official Cash Rate to 3.00% people are beginning to question their mortgage decisions, specifically whether or not to break out of their fixed term rates and either float or fix at a lower rate.

Fixed rates are a good way to budget your mortgage however you cannot always make extra payments or pay off your loan without generating a ‘break fee’. It has been very attractive for home owners to fix for longer lengths of time. Fixed rates have been a way to lock in a perceived ‘good’ rate for a longer period of time. Hopefully riding out any increases along the way.

With this continued reduction in rates those on longer 3, 4, 5 year fixed terms are now looking at other options, especially as the floating rate is around the 6% mark which may be less than the older fixed rate.

Although floating rates change depending on the Official Cash Rate (OCR) they are a lot more flexible than a fixed rate. You can pay off more of your mortgage without any financial penalties that would occur on a fixed rate. For instance if you wanted to add an extra $100 per month to your mortgage payments, you can do this on your floating rate and enjoy the interest you will be saving in the long run.

A structured mortgage that has a mix of floating and fixed rates can ride out the interest rate changes. Although you may end up paying a bit more to float your loan, you can still take advantage of the floating loans ability to make extra payments should you wish to pay more off and save in the long-term.

Breaking a fixed mortgage

For those that have signed up for a fixed rate and want to ‘break’ this mortgage to take advantage of the lower rates, you would want to make sure that the savings are substantial enough to warrant the break fee. Banks use a complex formula to work out break fees and I recommend you give us a call to discuss this.

As an illustration Westpac have the following scenarios on their website:

18 months ago John and Mary had a $200,000 home loan with 25 years left in its term, and they signed a contract for a fixed rate of 7% for 3 years. Their regular repayments are $1,414 per month. They now have another 18 months left to run on their fixed rate home loan.

If they break their home loan now the fixed rate break cost will be approximately $14,500.

Scenario 1: Paying off their loan

John and Mary decide to pay off their loan in full because they sell their home, and do not repurchase. The break cost will need to be paid immediately.

Scenario 2: Switching to a lower interest rate

John and Mary decide to break their fixed rate home loan because they want to go to a new lower rate of 18 months at 5.85%. The break cost will need to be paid immediately.

Their monthly regular loan repayment will reduce by $144 per month and they will save approximately $2,592 in interest over the next 18 months.

Scenario 3: Switching to a lower interest rate and adding the break cost to the loan

John and Mary decide to break their fixed rate home loan because they want to go to a new lower rate of 18 months at 5.85%. However they can't afford to pay the break cost upfront, so they decide to increase their loan to cover the cost.

Their monthly loan repayment will reduce by $52 and they will save $936 in interest over the next 18 months. However, at the end of 18 months their loan will be almost $14,500 higher.

The above scenarios are demonstrative examples and do not take into account your personal situation or goals. Every loan transaction differs, so please feel free to contact us to review your specific loan situation.

To see if it is worth breaking your loan please contact us and we can approach the lender to ascertain whether it’s mathematically worth it or not.

 


Contact us to get free personal mortgage and home loan advice








Captcha Image

For discounted interest rates on existing loans

100% New Zealand
SBS BankSovereignTowerWestpacAIAAMPANZAsteronASBAvanti Finance
Liberty FinanceThe National BankPartners LifePublic TrustDBR Property FinanceFidelity LifeGeneral FinanceOnePathBetter Mortgage ManagementThe Co-operative Bank