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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.

August's Property Gazette

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

Be Prepared for an OCR Drop

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

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

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

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

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

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

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

Expansion costs – as technology changes, the machinery your business relies upon becomes outdated or not as cost-effective as in the past to operate.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

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

Insurance Matters……….

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

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

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

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

Will job loss ruin house purchase?

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

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

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

Is there anything you can do to protect yourself?

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

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

 

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

October's Property Gazette

Published by Scott Miller on Thursday, October 01, 2015 in

Why so much paperwork?

In June 2015 The Credit Contracts and Consumer Finance Amendment Act (commonly known as the Responsible Lending Act) and its code of practice came into force.

All lenders now have to meet the responsible lending obligations outlined in the Act and Responsible Lending Code. This puts New Zealand in line with international best practice but comes with a new set of challenges for lenders and ultimately some extra hoops to jump for borrowers.

So what are the key lender responsibilities?

- Lenders must make reasonable enquiries before entering into a loan or taking a guarantee to ensure that:

a) the credit provided meets the borrower’s needs

b) the borrower can make payments or comply with the guarantee

- Lenders must help borrowers and guarantors to make an informed decision 

- Lenders must treat borrower and guarantors reasonable and ethically, including when breaches occur, when unforeseen hardship is suffered and during a repossession process.

- Lenders must make sure that loans are not oppressive and that they don’t induce borrowers to enter into loans in an oppressive way

- Lenders must make reasonable inquiries to be satisfied the credit-related insurance will meet the borrower’s requirements and the borrower will be able to make payments without undue hardship. 

– Advanced Mortgage Solutions can explain all of these responsibilities and how they affect a borrower

Lenders must meet all other legal obligations – including under the Fair Trading Act and the Consumer Guarantees Act.

To ensure you put the best possible application forward when securing a home loan, always use a mortgage broker. This is what we are trained in, we know the pitfalls, what criteria the banks are using. We are in your corner and work hard to get your application approved.

Contact me today for a no obligation chat about your mortgage requirements.

If you think this article could be of interest to someone else, please feel free to forward it to them.

Chistchurch Mortgage Broker - Property Gazette August

Published by Scott Miller on Thursday, August 02, 2012 in

 
Current Interest Rates as at 02 August 2012  
Variable              5.60%  
6 Month Fixed     4.99%
1 Year Fixed        5.15%
2 Year Fixed        5.35%
3 Year Fixed        5.60%
4 year Fixed        5.79%
5 Year Fixed        5.99%
 

Interest Rate Outlook

Despite record low mortgage interest rates, sales volumes remain constrained by relatively low levels of stock on the property market. With buyers competing for a limited quantity of available properties, the days to sell have fallen close to a three year low, with prices continuing to trend higher.

Sales volumes in all regions of New Zealand (bar one) are above the levels seen for the same period last year with Auckland and Canterbury remain the hotspots of growth. Strong mortgage approvals suggest momentum in the market will continue. The recovery in residential building activity from historical low levels is also showing similar regional demand in Auckland and Canterbury. Migration numbers remain volatile, but a turnaround in net inflows will support domestic spending and the housing market.

The residential market is delicately poised with low numbers of properties for sale and rising prices demonstrating competing tensions within the housing market. Support continues to come from record low interest rates and aggressive competition across all of New Zealand’s mainstream lenders who are literally buying business at present. However growth continues to be slightly constrained by affordability and consumers desire to reduce their debt while rates are low.

There have been small changes to fixed mortgage rates for terms of 2 years and less over the past month. These changes have "smoothed out" the mortgage yield curve which now has the 2 year rate as its low point. By contrast there have been no changes to the floating rate or fixed rates for terms of 3 years or longer.

In our view the RBNZ is unlikely to cut the OCR for the balance of 2012. However with 6 month to 2 year fixed rates all lower than the floating rate, borrowers have the ability to "lock in" interest rate cuts by fixing. We therefore believe it makes sense to fix for 2 years – 3 years, not in an attempt to "hide" from the possibility that the RBNZ might raise rates, but simply to save money.


What’s Hot

Specials – depending on the balance of the portfolio of a bank they often run a “special” to try and attract money for a specific term. As an example we have one bank offering 4 year fixed @ 5.79% and a completely different bank offering 5.99% for 5 years fixed – Please call me for more details.

Deal of the Month

We had a client stuck between the purchase of their new dream home and the sale of their pre-loved dwelling, with interest rates at a record low we were able to structure a bridging loan for them that was no more expensive than what they were paying out monthly - Call us we deliver!

Mortgage Broker Christchurch - Property Gazette - May

Published by Scott Miller on Friday, May 04, 2012 in

                 AMS Property Gazette - May

I would like to start May’s Property Gazette by saying thank you to all those who visited our new Facebook page and clicked the like button. Your participation is most welcome.

If you missed this opportunity last month and would like to have a look please click here to be automatically taken to the Advanced Mortgage Solutions welcome page.


Now on with what’s happened this month.

Current Interest Rates as at 1 May 2012  

Variable               5.50%  
6 Month Fixed     5.40%
1 Year Fixed        5.40%
2 Year Fixed        5.55%
3 Year Fixed        5.85%
5 Year Fixed        6.65%
 
Interest Rate Outlook

There’s a more positive vibe in the market as the new financial year gets underway. The increase in general business and housing activity (which was widely predicted to occur in 2011) is now starting to appear.

This is being supported by good demand and prices for residential properties in the larger cities of New Zealand. The continuing population increase of Auckland, and the Christchurch earthquake rebuild mean that these 2 cities are leading the charge. The increase in house prices should start a flow on effect to other sectors in New Zealand.

This demand is now starting to push up an increase in both residential property rents and values. These increases are driven purely by supply and demand. The shortage of houses being built (coupled with the perception that prices are rising), is creating strong demand in the market, even while economists are quoting various housing unaffordability statistics.
We have seen residential property values rise 3.0% across the country over the last year and are now just 3.0% off their 2007 highs. Auckland has led the charge, up 5.0%, followed by Christchurch at 4.1%, and Whangarei at 3.1%.

Mortgage rates have not changed and have held steady since the last round of reductions in mid-February. The mortgage curve has been very “flat” out to 2 years. We still believe the Reserve Bank will move rates up late in 2012 or early in 2013, this would suggest that it might be worth fixing for 2 or 3 years, particularly as longer term fixed interest rates can go up without a change to the official cash rate.

Now is a great time to look into your options. Please feel free to email me by clicking here or contacting me on 0508 466 356 to talk through what’s best for you.

What’s Hot

The market!
Money has never being so cheap and banks are fighting over each other for business. We have seen an increase in lending every month this year and feel that it is set to continue.

Deal of the Month

Consolidating debt can be a great way to reduce your monthly commitments and get back on top of your cash flow. Last month we refinanced a client’s debts, putting together the mortgage, car loan & 2 credit cards which were costing $1,880.00 per month into one loan @ 5.50%, reducing the payments by 690.00 per month to $1,190.00 per month - call us we deliver!

Advanced Mortgage Solutions | Property Gazette - April

Published by Scott Miller on Wednesday, April 06, 2011 in



   Our recovery has literally been shaken to a standstill, with major seismic events both locally and in Japan hitting home, the focus of people is survival and recovery not economic growth.

We had started 2011 quite strongly, commodity prices (read dairy) were surging, mortgage approvals were on an upward trend breathing life into the real estate market and confidence was improving overall, not that it had yet flowed through to retailers.

However with the events of Christchurch & Japan hitting us all between the eyes our economy is taking a massive hit with an estimated $15 - $20 Billion of capital destroyed and needing to be replaced. The process of which will stimulate economic growth but having this thrust upon us by having to replace assets lost is not the sort of growth we were looking for.

Thankfully, prudent management by government has seen us in the fortunate position of a strong balance sheet with relatively low levels of debt which allows us to lean on this position to stimulate the growth that is needed.

The Reserve Bank cut interest rates by a surprising and quite whopping 0.50% which with more than half of New Zealanders on a variable rate mortgage currently will be pleasantly felt in the pockets of all of these mortgage holders immediately. Surprisingly we say because while this was described as “an insurance measure” it is still in the face of an inflation rate that sits at the maximum of government preferred scale @ 4%, albeit no doubt we need help given the size of the challenges ahead.

Recover we will though, with Rugby World Cup set to pour millions into our economy and of the course the rebuild of Christchurch set to start a huge cash-flow cycle not seen in this country for many a year.

With interest rates so low many a consumer is unsure as to what the best interest rate option is for them right now but we are leaning to sitting on the floating rate as these are the cheapest in the market in the mid 5% range and we cannot see any increase on the horizon in the immediate future, in fact we do not believe that we will see any increases until the very back quarter of 2011 and maybe not until early 2012. Why pay 6.40% now we you can enjoy mid 5%?

What's Hot
With the above reduction in interest rates, the Variable rate is certainly hot right now, with the 0.50% off rates this has equated to a saving of over $1500.00 per annum on the average mortgage, coupled with a continuing loosening of bank criteria we are seeing the first home buyer market starting to perk its eyes and ears up.

Deal of the Month
90% LVR lending is well & truly available; the trick is understanding the criteria and knowing how to package the application up so it meets the same. Last month one of our Advisers had a Referrer on his doorstep with a client who had been declined by 3 banks, we got him approved and saved not only his purchase but the 3 backed up on it - Call us we deliver!

Advanced Mortgage Solutions | Property Gazette - March

Published by Scott Miller on Tuesday, March 01, 2011 in



Interest Rate Outlook

Current Interest Rates

Rates offered are the best of standard, carded interest rates available and do not reflect any discounts your Advisor may be able to obtain for your client. Rates correct as at 01/3/11.

Variable

6.10%

6 Month Fixed

5.95%

1 Year Fixed

6.19%

2 Year Fixed

6.45%

3 Year Fixed

6.85%

5 Year Fixed

7.50%

   Where do we start? After the disaster of the devastating earthquake in Christchurch last week it seems insignificant to be putting pen to paper about interest but perhaps our best lesson is learned from those most affected with Christchurch simply rolling its sleeves up and getting on with what needs to be done. Our hearts go out to all of those affected.

Just as the earthquake of 4 September disturbed economic activity for some time, so too will this one - probably with greater effect, which means the near zero growth we think occurred during the December quarter is going to be not much bettered in the first quarter of this year (if in fact there is any growth at all).

The interruption to growth is so large that we now see little chance that the Reserve Bank will feel the economy is strong enough to withstand any interest rate rises this year and it is more than likely that we will see interest rates remain flat throughout 2011. While some Economists are promoting a possible interest rate cut when the Reserve Bank meets again on March 10 we do not buy into this theory with no real immediate gain to be felt from this in the area it’s most needed - the Christchurch economy.

The reduced outlook for interest rates implies the Kiwi dollar will stay slightly lower than would otherwise have been the case, especially as inflation appears to be picking up in the UK and Europe raising the chances that interest rates will be increased in those economies this year.

The light trying to shine through the smoke & dust of the quake is the diary sector with Fonterra revising up their forecast pay-out for this season from $7.30 up to $8.00. This payout will incorporate the traditional milk solids pay-out of $7.50 plus a distributable profit range of 40-50 cents, which will boast the rural sector into spending, helping our economy to grow. The above all points to our recommended borrowing strategy changing somewhat from previous months whereby we can now see little chance of interest rate rises this year. As such we are currently recommending that taking the floating interest rate probably makes most sense both now and for the foreseeable future, additionally we note these rates are currently the cheapest on offer in the market in the very low 6% range.

What's Hot


We have seen a further loosening of credit criteria in the early part of 2011 with another two of our core lenders setting clear parameters allowing lending up to 95% LVR for owner occupied purchases. While certain criteria must be meet for applicants to qualify (such as stability of employment and minimum income levels) this is certainly a good sign and further emphasises the increasing appetite of the banks.


Deal of the Month


We had a nice deal approved last month assisting one of our referrers into an investment property with only putting 15% deposit down. To date banks have requested a minimum 20% deposit on investment properties but due to the overall strength of our client we were able to assist. - Call us we deliver!


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