Calculate your repayments using our

Online Mortgage Calculator


Our Blog Articles

On this page, we show the latest feeds of our blog articles. We post our blog on this address: mortgagemantranz.blogspot.com

Please go to the above address to post comments on our blog article.

Why Mortgage Mantra


Why use mortgage mantra or any other broker and not your own bank or another bank?

·         BANK SELLS ONLY 1 PRODUCT – THEIR OWN

·         IF YOUR APPLICATION DOES NOT FIT THE BOX – DECLINED (NO REASON GIVEN IN MANY CASES)

·         IF YOUR APPLICATION IS APPROVED – NOT MUCH SCOPE ON NEGOTIATIONS OF RATES & FEES IN MOST CASES

·         YOU MAY BE CHARGED APPLICATION FEE, LOW EQUITY MARGIN

·         YOU HAVE TO TAKE TIME OFF TO GO TO THE BANK AT LEAST ONCE

·         IN MANY CASES YOU DO NOT EXPLAIN YOUR SITUATION FULLY

·         BANK MAY NOT BE FLEXIBLE – DO NOT FIT THE BOX SCENARIO

·         BANKER MAY BE NEW TO ROLE AND APPLICATION IS DECLINED

WE HAVE ACCESS TO DIFFERENT LENDERS WITH DIFFERENT SHAPED BOXES TO MEET YOUR APPLICATION NEEDS

·         WE COME TO YOU AND SPEAK YOUR LANGUAGE-UNDERSTAND YOU AND YOUR SITUATION BETTER AND PRESENT THE APPLICATION DIFFERENTLY TO ACHIEVE AN APPROVAL THAT MATCHES YOUR NEEDS.
·         WE ARE ABLE TO MATCH THE APPLICATION WITH A LENDER

·         WE SEARCH FOR THE MOST VIABLE OPTION FOR YOU IN CONSULTATION WITH YOU

·         WE GUIDE YOU THROUGH THE BUYING PROCESS-EVERY STEP WHEREAS THE BANK WILL NOT BE AS INTERESTED AS WE ARE

·         WE ARE AVAILABLE 7 DAYS A WEEK TO ANSWER YOUR QUERIES OR TO VISIT YOU AT YOUR PLACE

·         IN CONSULTATION WITH YOU AND AFTER WORKING ON YOUR BUDGET, WE WILL PUT THE APPROPRIATE LOAN STRUCTURE IN PLACE FOR YOU.

·         IN MOST APPLICATIONS, WE DO NOT CHARGE YOU A FEE. IF THERE IS A FEE INVOLVED, THIS IS DISCUSSED AND AGREED ON BEFORE WE START WORK ON YOUR APPLICATION.
read more

Why Refinance

WHY REFINANCE?

•    CHANGING FROM A NON-BANK TO A BANK OR FROM ONE BANK TO ANOTHER-PERSONAL SERVICE,POLICY GUIDELINES ARE DIFFERENT
•    UNHAPPY WITH CURRENT PROVIDER FOR VARIOUS REASONS INCLUDING:
•    BETTER INTEREST RATE-PAYING HIGHER RATES CURRENTLY
•    BETTER OVERALL LOAN STRUCTURE (FLEXIBILITY TO CHOOSE BETWEEN FIXED & VARIABLE RATE LOANS)
•    ABILITY TO MAKE SOME EXTRA REPAYMENTS
•    BUYING ANOTHER PROPERTY
•    HELPING A FAMILY MEMBER BUY A PROPERTY
•    BORROWING ADDITIONALLY TO – RENOVATE/UPGRADE/EXPAND/BUILD/IMPROVE
•    DEBT CONSOLIDATION – CAR LOAN,C/C,HP,PERSONAL LOAN,OTHERS

THERE ARE A FEW OTHER REASONS. WHEN CONSOLIDATING DEBT –WHETHER REFINANCING OR NOT- NEED 6 MONTHS REPAYMENT HISTORY OF LOANS BEING CONSOLIDATED/REFINANCED

SHOULD HAVE SUFFICIENT EQUITY TO BORROW ADDITIONALLY

SHOULD HAVE ENOUGH INCOME TO SERVICE ADDITIONAL BORROWINGS

IS PROPERTY ACCEPTABLE TO NEW LENDER?   

COSTS INVOLVED: EARLY REPAYMENT FEES IF ON FIXED RATE TERM OR EARLY EXIT FEES IF WITH A NON-BANK LENDER (CHECK LOAN TERMS), ADMIN FEES, VALUATION, SOLICITOR, and NEW SET-UP OF
AP ‘S, LENDER’S FEES, LOW EQUITY PREMIUM IF LVR OVER 80% 

SOME OF THE COSTS ARE EXPLAINED
read more

Why Insurance


Why personal life insurance?

10 reasons to get life insurance...and hold on to it

People insure their car, furniture, luggage,travel and even their pets - but often neglect to insure their hard-earned lifestyle.  Left uninsured, which would be the greatest loss?
Purse strings may be tight today, but you'll still want to keep your long-term financial goals on track.  We all like to think “it’s never going to happen to me”, but accidents and illness can happen. And some of us die too soon. Life can be unpredictable, which is why many of us decide to protect ourselves with some form of life insurance and disability. 
Here's why a combination of life, disability and critical illness cover could be your best protection:
  1. At some point, there’s a good chance you’ll be too sick to work over an extended period of time.2 out of 5 people could be unable to work for six months or more because of sickness or accident.1
  2. ACC can’t always help you. Contrary to popular belief, you can’t rely on accident compensation in all situations. And you’re more likely to be disabled by illness than by accident – 40% of disabilities are due to disease or illness while only 34% are due to accident or injury.2 Insurance for illness and injury can help when ACC isn’t able to.
  3. Sickness is more likely to leave you with a long-term disability. Of disabilities lasting six months or more, only one in 20 is related to accidental causes.3 Insurance can help keep your household running while you recover. It can also fund rehabilitation and retraining to speed your return to work.
  4. Many people die before the age of 65. Most of us think we’ll live to a ripe old age, but one in six males and one in nine females over the age of 30 will die before they reach 65.4 Life Cover pays a lump sum if you die, to look after the people you leave behind.
  5. You’re a key income earner for your family. How long could your family survive without the income you generate? Insurance, such as Family Protection, provides an ongoing monthly income.
  6. You have a mortgage. Who would pay the mortgage if your income stopped, and how long could they keep it up? An insurance claim could be used to clear or reduce an existing mortgage.
  7. Recovery is faster without financial stress. Worrying about money doesn’t help recovery after an illness or injury. Insurance eases your concerns, so that you can relax and get better.
  8. Of cancer patients, 52% of males and 59% of females will still be alive five years later.5 Treatment for cancer often makes it hard or impossible for people to work. Living Assurance protects your lifestyle while you recover.
  9. If you have a stroke, survival could mean ongoing disability. A study of the population of Auckland reveals that while the number of deaths after stroke has declined, there has been a significant increase in the number of people with an impaired level of consciousness and mobility following stroke.6A lump-sum payment from Total Permanent Disablement insurance is a huge help if this happens.
  10.   Raising a family as a solo parent is hard work. If you died suddenly, your partner or spouse would have the task of raising the children without your help. Life Cover can take care of your family financially, making it easier to maintain the lifestyle they’re used to.

Life Cover personal & business

Life Cover

Life Cover pays out in the event of your death – either as a lump sum or as a monthly benefit. This type of cover can support the loved ones you leave behind, and if you're a business owner or shareholder, it can also secure the business' long-term survival.
Leaving a lump sum to the people who matter most
If your family needs your income to survive, Personal Life Cover can help them to cope financially without you.

Leaving a lump sum to take care of your business partners
Businesses can be at risk when a partner dies. Business – Life Cover can make it easy for surviving partners to take over your share and keep the business running.

Creating an ongoing monthly income for your family
If you’d rather leave your family with an ongoing monthly benefit, instead of one big lump sum, you may prefer Family Protection.

Accidental Death another option
For people who aren’t eligible for regular Life Cover, or simply need a more affordable option, Accidental Death insurance could be the answer.

read more

Eligibility to qualify for Home Loan

WHO QUALIFIES FOR A HOME LOAN IN NEW ZEALAND ?
•    NZ RESIDENT / NZ CITIZEN / AUSTRALIAN CITIZEN
•    THESE 3 CATEGORIES EASILY QUALIFY FOR 95% BORROWING – BORROWING WITH ONLY A 5% DEPOSITFOR A FIRST HOME
•    NZ WORK PERMIT HOLDERS QUALIFY – DIFFERENT CRITERIA
•    NON – RESIDENTS QUALIFY – DIFFERENT CRITERIA
•    IF YOU ARE ON A WORK PERMIT OR ARE A VISITOR TO NZ-ASK ME HOW
•    APPLICANT SHOULD BE AT LEAST 18 YEARS OF AGE
•    YOUNGER APPLICANTS QUALIFY FOR UP TO A 30 YEAR TERM – I PERSONALLY NO LONGER RECOMMEND A 30 YEAR TERM
•    APPLICANTS OLDER THAN 60 NORMALLY GET A LIMITED TERM-THIS CAN DIFFER WITH DIFFERENT LENDERS
•    APPLICATIONS CAN BE SOLE APPLICANT / SOLE INDIVIDUAL OR MULTIPLE APPLICANTS( JOINT /FAMILY)
•    APPLICANT/S SHOULD HAVE SOME FORM OF VERIFIABLE INCOME
•    FOR 95% LENDING – WORK HISTORY MUST BE STEADY – MINIMUM 1 YEAR IN CURRENT ROLE FOR MOST LENDERS
•    SOME LENDERS STIPULATE MINIMUM ANNUAL INCOME FOR 95%
•    BENEFICIARIES ALSO QUALIFY FOR HOME LOANS
•    SOLO MUMS/SOLO PARENTS WITH AN INCOME ALSO QUALIFY
•    LENDERS PREFER INCOME DERIVED IN NZ
•    SOME LENDERS WILL CONSIDER OVERSEAS INCOME – CRITERIA IS DIFFERENT FOR THESE APPLICATIONS
•    AT 95% LVR LENDERS NEED A CLEAN CREDIT FILE WITH LITTLE OR NO SHORT TERM DEBTS(STUDENT LOAN IS OKAY WITH SOME)
•    SQUEAKY CLEAN ACCOUNT CONDUCT IS A MUST
•    NO UNAUTHORISED OVERDRAFTS OR MISSED DD/APread more

Types of Loan


WE ARRANGE MORTGAGES & PERSONAL RISK INSURANCE

Types of loans arranged: ANYWHERE IN NZ

·        PRIMARILY HOME LOANSANYWHERE IN NZ

·        FOR FIRST HOME BUYERS – BUYING A DWELLING WITH SAVED DEPOSIT – (SAVED DEPOSIT IS MINIMUM 5%)

·        BUYING YOUR FIRST HOME OR NEXT HOME WITH A GIFTED DEPOSIT– MORE THAN 5% DEPOSIT REQUIRED IN MOST CASES OF FIRST HOME PURCHASE

·        SHARED EQUITYPOSSIBLE FOR FIRST HOME PURCHASE IF NO DEPOSIT CAN BE CONTRIBUTED -CALL FOR DETAILS

·        SUBSEQUENT PROPERTY PURCHASESCAN USE EQUITY IN EXISTING PROPERTY OR A DEPOSIT OR A GIFT OR COMBINATION OF ALL

·        REFINANCEFROM CURRENT LENDER TO A NEW LENDER IF UNHAPPY WITH CURRENT LENDER

·        TOO MANY EXTERNAL DEBTS -HELP CONSOLIDATE OTHER DEBTS WITH HOME LOAN TO EASE CASH-FLOW & SAVE ON INTEREST COSTS

·         IF YOU HAVE A SURPLUS IN YOUR BUDGETS. I CAN HELP
           RE-STRUCTURE MORTGAGE TO PAY OFF EARLY.
           MAY NOT BE ABLE TO PAY OFF MORTGAGE EARLIER IF    
           THERE IS NO SURPLUS.

·        HOME LOANS FOR SELF-EMPLOYED-MUST HAVE AT LEAST 1 YEAR TRADING HISTORY AND A SAVED DEPOSIT

·        SECTION PURCHASE – NEED AT LEAST 25% DEPOSIT

·        CONSTRUCTION LOANS – PROGRESSIVE DRAWDOWN BASED ON VALUATION REPORTS

·        CAN ASSIST IN TAKEOVER OF INCOMPLETE BUILDING PROJECTS

·        LOAN ARREARS– MAY BE ABLE TO ASSIST-CALL FOR DETAILS

·        COMMERCIAL PROPERTY PURCHASE – ANYWHERE IN NZ

·        BUSINESS FUNDING – EQUIPMENT FINANCE/BUSINESS PURCHASE/WORKING CAPITAL NEEDS

·        PERSONAL LOANS– SECURED / UNSECURED

LOANS OUTSIDE NORMAL LENDING CRITERIA

LOANS TO CREDIT IMPAIRED – MAX LVR 60 – 70%

ANY OTHER LOANS - PLEASE TALK TO US

WIDE RANGE OF PERSONAL & BUSINESS INSURANCE

I COME TO YOUR DOOR STEP

AAPKE KADMO TAK AATHE HAIN


read more

Turning Declined to Approved


 APPLICATION BEING DECLINED-HOW TO ADDRESS THESE ISSUES

·          AGE FACTORS- UNDER AGED (BELOW 18) OR TOO OLD TO BE ABLE TO SERVICE A 25 YEAR TERM BASED ON CURRENT PROFESSION…LENDERS SHOULD NORMALLY NOT DISCRIMINATE AGAINST OLDER AGE

ENSURE THE APPLICANT IS AT LEAST 18 AND AT THAT AGE YOU HAVE STRONG REASONS TO INCLUDE THE YOUNG APPLICANT.

AT A HIGHER AGE,ENSURE THE APPLICANT HAS A STRONG WORK HISTORY, NO OTHER BORROWINGS AND RELIABLE INCOME GOING FORWARD

  • NON-RESIDENT OR OTHER VISA
HAVE A SUBSTANTIAL DEPOSIT ESPECIALLY IF THE VISA IS NON-WORK RELATED

·          DEPOSIT MAY NOT BE SAVED FOR REQUIRED PERIOD-LUMP SUM/ONLY GIFTED DEPOSIT & NO EVIDENCE OF ANY SAVINGS FROM APPLICANT


KEEP DEPOSITING MONEY INTO A DEDICATED ACCOUNT REGULARLY.
IF DEPOSIT IS GIFTED,SHOULD HAVE NO EXTERNAL DEBTS, AND SHOULD HAVE GOOD ACCOUNT CONDUCT, GOOD WORK HISTORY, CLEAN CREDIT

·          SOURCE OF DEPOSIT NOT EXPLAINED SATISFACTORILY-NO PAPER TRAIL

FILE STATEMENTS REGULARLY,IF OVERSEAS SOURCE OF FUNDS – GET PAPERWORK ORGANISED IN ADVANCE,IF GIFTED – GET A GIFT DEED COMPLETED


·          FREQUENT CHANGE OF EMPLOYMENT W/OUT VALID REASONS

TRY NOT TO CHANGE JOBS – ESPECIALLY CHANGE OF CAREER-UNLESS YOU ARE GOING BACK TO A CAREER YOU HAVE BEEN IN EARLIER

·          FREQUENT CHANGE OF RESIDENTIAL ADDRESS

YOU NEED REALLY SOUND REASONS FOR THIS – NOT JUST UNHAPPY WITH THE LANDLORD OR THE NEIGHBORS

·          INCOME IS EXTREMELY IRREGULAR- IRREGULAR DEPOSITS TO A/C

ENSURE ALL INCOME COMES INTO YOUR ACCOUNT REGULARLY-EVEN IF YOU ARE PAID BY CASH BY YOUR EMPLOYER

·          SOURCE OF INCOME NOT CONFIRMED OR UNACCEPTABLE TO LENDER

ASK EMPLOYER FOR A LETTER CONFIRMING INCOME,ASK FOR A PAY SLIP
  • IN CURRENT EMPLOYMENT ROLE FOR BRIEF PERIOD WITH NO PRIOR WORK HISTORY EITHER IN NZ OR OVERSEAS

YOU NEED TO BE IN A VERY GOOD PROFESSION WITH GOOD SKILL SETS AND GOOD EARNINGS,NO BORROWINGS AND A DEPOSIT THAT HAS BEEN SAVED

·          INSUFFICIENT INCOME FOR AMOUNT REQUIRED AS ON APPLICATION

DO YOUR HOME-WORK FIRST-CAN YOU AFFORD THE REPAYMENTS FOR THE LOAN THAT YOU ARE SEEKING…ARE THERE OTHER BORROWINGS THAT ARE AFFECTING YOUR REPAYING ABILITY?

·          TOO MANY EXTERNAL BORROWINGS – HP’S, CREDIT CARDS/S, PERSONAL LOAN/S, DEFERRED INSTALMENT PLANS…

YOU HAVE BEEN LIVING IN A WORLD OF DREAMS.DO NOT BORROW UNLESS YOU ABSOLUTELY NEED SOMETHING…..WANTS VERSUS NEEDS? ANALYSE. BORROW SMALLER AMOUNTS OVER SHORTER PERIODS

·          BANK ACCOUNT CONDUCT NOT ACCEPTABLE (REFER TIPS OF LAST WEEK)

·          A/P’S & D/D’S REVERSED WITHOUT STRONG REASONING

YOU NEED TO MONITOR YOUR BANK TRANSACTIONS & BALANCES DAILY- ENSURE A/P’S & D/D’S ARE LOADED FOR DATES WHEN YOU HAVE SUFFICIENT BALANCE IN THE ACCOUNT-VERY OFTEN THESE DATES MISS SALARY DATES BY A DAY OR TWO-ASK FOR A REVISED PAYMENT DATE

·          INFO DISCLOSED IS INCORRECT / INCOMPLETE – APPLICATION COULD EARLIER HAVE GONE TO SAME LENDER WITH DIFFERING INFORMATION.
·          NON-DISCLOSURE OF INFO IS QUITE SERIOUSLY VIEWED

·          BAYCORP HISTORY NOT GOOD ENOUGH-

DO NOT GUARANTEE/BORROWUNLESS NECESSARY-IF YOU ARE AWARE OF A DEFAULT,DECLARE IN ADVANCE, HAVE GOOD REASONS FOR THE DEFAULT

  • INSUFFICIENT TRADING PERIOD FOR SELF-EMPLOYED-HIGHER DEPOSIT

  • WRONGLY ASSESSED BY LENDER-POINT OUT ERRORS IN ASSESMENT AND USE THE SERVICES OF AN EXPERIENCED MORTGAGE ADVISOR – THINK MORTGAGE MANTRA

  • PROPERTY NOT ACCEPTABLE TO LENDER – LISTEN TO LENDER AND QUERY REASONS – LENDER MAY BE CORRECT AND SAVING YOU FROM A POTENTIAL SITUATION

  • IF REFINANCING – HAS MISSED REPAYMENTS ON HOME LOAN TO PREVIOUS LENDER IN THE LAST 6 – 12 MONTHS

WHY HAVE YOU MISSED PAYMENTS? YOU KNOW BEST.EXPLAIN REASONS AND BACK UP WITH DOCUMENTED EVIDENCE

09.08.2010

read more

Pre-approval Process for Home Loan


THE LOAN APPROVAL OR PRE-APPROVAL PROCESS-1st steps

APPLICATION IS COMPLETED, SIGNED AND SUBMITTED FOR ALL APPLICANTS WITH SUPPORTING PAPERSincluding-

  • EVIDENCE OF INCOME - PAY SLIPS OR FINANCIALS IF IN BUSINESS
  • CURRENT 3 MONTHS BANK STATEMENTS FOR ALL APPLICANTS FOR ALL BANK ACCOUNTS OPERATED 
  • EVIDENCE OF DEPOSIT SAVED(LOCAL OR OVERSEAS ACCOUNTS)WHETHER  BUYING FOR THE FIRST TIME OR OTHERWISE OR  DETAILS OF EQUITY IN EXISTING PROPERTY HELD BY APPLICANTS
  • EVIDENCE OF RESIDENCY OR CITIZENSHIP /PHOTO  ID FOR ALL APPLICANTS
  • PRE-APPROVAL IS NORMALLY RECEIVED WITHIN 48-72  HOURS  OR 2 – 3 WORKING DAYS NORMALLY


·        THE APPROVAL OR PRE-APPROVAL LETTER NORMALLY OUTLINES TERM OF MORTGAGE (NUMBER OF YEARS), INDICATIVE INTEREST RATES, INDICATIVE REPAYMENTS (DIFFERENT LENDERS SEND DIFFERENTLY STRUCTURED OFFER LETTERS) & IS NORMALLY WITH CONDITIONS – WHAT ARE THE CONDITIONS?

·        FURTHER EVIDENCE OF DEPOSIT (ESPECIALLY IF TRANSFERRING FROM OVERSEAS)

·        FURTHER EVIDENCE OF INCOME

·        FURTHER EVIDENCE OF  BANK STATEMENTS- MAY BE MISSING SOME INFORMATION OR ENTRIES ON THE BANK STATEMENT NEEDING CLARIFICATIONS

·        SALE & PURCHASE AGREEMENT ,6 MONTHS LOAN STATEMENTS IF REFINANCING

·        SOME LENDERS ASK FOR A BUILDING INSPECTION REPORT IF THE PROPERTY HAS BEEN BUILT DURING A CERTAIN PERIOD (LEAKY BUILDING?)

·        REGISTERED VALUATION IF USING EQUITY TO FUND NEXT PROPERTY PURCHASE OR IF PURCHASING THROUGH PRIVATE TREATY AND POSSIBLY REGISTERED VALUATION ON THE NEW PROPERTY BEING PURCHASED

·        POSSIBLE UPPER LIMIT ON MORTGAGE TERM
 
WE HAVE BRIEFLY TALKED ABOUT THE APPLICATION, DETAILS OF DOX REQUIRED FOR AN APPROVAL/PREAPPROVAL. WE HAVE YESTERDAY TALKED OF THE CONDITIONS A BANK MAY PUT DOWN ON AN OFFER LETTER.


YOU MUST FULLY UNDERSTAND THE CONDITIONS AND FINANCIAL IMPLICATIONS OF THE PRE-APPROVAL:

·         WHAT IS THE LOAN AMOUNT APPROVED-DOES IT MATCH YOUR NEEDS- IS IT WHAT YOU WERE PREPARING FOR? OR IS IT LESS THAN WHAT YOU WERE EXPECTING.

·         WHAT IS THE LOAN TERM-ARE YOU COMFORTABLE- THE LONGER THE MORTGAGE TERM, THE MORE INTEREST U END UP PAY ING THE LENDER.

·         THE SHORTER THE MORTGAGE TERM, YOU PAY MORE ON REGULAR INSTALMENTS – BUT YOU SAVE ON INTEREST COSTS.YOU COULD SAVE THOUSANDS OF $$$.

·         WHAT ARE REPAYMENTS BASED ON THE CURRENT INTEREST RATE& MORTGAGE TERM? REMEMBER TODAY’S INTEREST RATES ARE LOW AND REPAYMENTS WILL ALSO BE LOWER.INTEREST RATES ARE BOUND TO INCREASE AT SOME STAGE AND THEREFORE YOUR MORTGAGE INSTALMENT WILL ALSO INCREASE.

·         CAN YOU AFFORD REPAYMENTS BASED ON THE CURRENT INTEREST RATE AND THE TERM CHOSEN


·         WHAT WILL REPAYMENTS BASED ON HIGHER INTEREST RATES BE IN FUTURE (CALCULATE AT 9 – 10% JUST TO CHECK YOUR BUDGET CAN WITHSTAND THE REPAYMENTS). THERE SHOULD NOT BE ANY ROOM FOR A SHOCK LATER WHEN INTEREST RATES ARE HIGHER THAN TODAY’S INTEREST RATE.


·         CAN YOU AFFORD REPAYMENTS ON THE HIGHER INTEREST RATE LATER ON

DO YOU HAVE ANY MONEY LEFT OVER IN THE HOUSEHOLD BUDGET AFTER MEETING ALL EXPENSES/COMMITMENTS AND THE MORTGAGE REPAYMENT
IF YOU HAVE ANSWERED NO TO THE SAVINGS QUESTION – YOU NEED TO BORROW LESSER
IF YOU HAVE ANSWERED YES – YOU COULD START PLANNING FOR THE PROPERTY PURCHASE AND START LOOKING FOR A SUITABLE PROPERTY.


23.08.2011
AFTER YOU HAVE DRAWN DOWN THE HOME LOANAND BEGINNING TO SETTLE DOWN IN THE NEW HOME.DO YOU NEED TO BORROW AGAIN AFTER THE PURCHASE HAS SETTLED?
·        TO FURNISH THE HOUSE – NEW FURNITURE,CURTAINS,CARPETS& NEW APPLIANCES
·        TO UPGRADE FACILITIES– RENOVATIONS OF KITCHEN OR BATHROOMS OR ADDITIONS TO THE DWELLING-like a deck
·        TO REPAY OTHER DEBTS YOU HAVE TAKEN IN THE INTERIM AFTER THE PREAPPROVAL
·        TO TRAVEL PERHAPS…TO VISIT FAMILY
IF YOUR ANSWER IS YES….YOUR PLANNING HAS NOT BEEN CORRECT OR YOU HAVE IGNORED THESE EXPENSES THINKING YOU CAN MANAGE WITH WHAT YOU HAVE
IF YOUR ANSWER IS YES….YOU NEED TO BORROW LESSER OR KEEP SOME MONEY ASIDE FOR THESE EXPENSES -CONSIDER OTHER OPTIONS AVAILABLE TO YOU TO FUND THESE EXPENSES OR DELAY THE SPEND ON THESE.
PERHAPS BUDGET FOR THESE EXPENSES BEFORE YOU CONSIDER BUYING OR COMPLETE THESE PURCHASES BEFORE BUYING THE PROPERTY
IF YOU ARE REPAYING HUGE DEBTS…YOU NEED TO REPAY DEBTS FIRST BEFORE CONSIDERING BUYING
OR GET SOME FINANCIAL ASSISTANCE FROM FAMILY
THE LOAN PRE-APPROVAL PROCESS IS A DEFINITE GUIDE FOR YOUR CURRENT AND FUTURE BUDGETS
16.08.2010WITH SATEND,16.08.2011& 18.08.2011 WITH NEHA

24.08.2011-NEHA
HOW MUCH SHOULD ONE IDEALLY BORROW FOR THE HOME LOAN?
This is your affordability.
THIS CAN BE TRICKY FOR A FIRST-TIME BUYER BUT THE ANSWER IS NORMALLY STRAIGHTFORWARD FOR THOSE WITH A BUDGET.
HOW MUCH RENT ARE YOU CURRENTLY PAYING EVERY WEEK?
IS THE LOAN APPLICATION A JOINT APPLICATION? IF YES, HOW MANY INCOMES WILL SERVICE THE LOAN? WHAT IS THE NET WEEKLY INCOME FROM ALL SOURCES?ARE THE INCOMES PERMANENT OR TEMPORARY?(JOB PERMAMENT?)
HOW MANY CHILDREN DO YOU SUPPORT?ARE YOU SPENDING ON DAYCARE FOR YOUR KIDS?
ARE YOU PLANNING ON STARTING A FAMILY IF YOU HAVE NO KIDS?
ARE YOU REPAYING ANY LOANS CURRENTLY?
WHAT ARE YOUR CURRENT WEEKLY EXPENSES – INCLUDE ALL EXPENSES NO MATTER HOW MINOR THEY MAY SEEM.WHAT ARE YOUR PLANNED FUTURE EXPENSES?
HOW MUCH MONEY ARE YOU LEFT WITH AT THE END OF THE MONTH AFTER MEETING ALL EXPENSES?
THE MONEY LEFT/SAVED PLUS YOUR RENT IS NORMALLY WHAT YOU CAN AFFORD.
REMEMBER THE 30% DSR RULE FOR BORROWING.
DO YOU HAVE ANY QUESTIONS?
How much can I borrow? (AFFORDABILITY)-24.08.11-neha

Even before you start looking for a home you need to know how much you can afford to spend on your loan repayments. You will need to work out your family budget – do your maths first…
You will need at least a 5% deposit to put down towards the purchase of your home. This 5% represents your contribution towards the purchase of your home. Ideally you will have saved this amount over the last 3 months or more. In exceptional situations, the lender may consider equity from a family member’s home as a deposit.
How much does your family earn every week/ fortnight/month/year? What is the family spending every week/ fortnight/month/year …include all expenses and do not forget to include any repayments on hire purchases, car & personal loans & any other borrowings. Are you planning a holiday? Budget for this holiday as well.
What are you able to save at the end of the month after providing for all expenses….The savings you have achieved towards the end of the month, after providing for all expenditure, plus the rent you are currently paying should be a guideline to the amount you can afford towards your mortgage repayments and costs.
Most banks & lenders will allow you to borrow between 3 – 5 times your gross annual incomes. The actual amount you can borrow will depend on a number of other factors such as….number of dependent children in the family, size & repayments of any personal borrowings, the type of property you may want to purchase, the amount of initial deposit.
RULE OF THUMB – 30% OF GROSS ANNUAL HOUSEHOLD INCOME FOR THE APPLICANT/S SHOULD BE USED TO REPAY ALL BORROWING.

25.08.2011 -HOW MUCH TO BORROW? THIS IS AN EXAMPLE:
COUPLE WITH 2 SCHOOL-GOING CHILDREN ON COMBINED GROSS ANNUAL INCOME OF $125,000(APPROXIMATELY $100,000 NETT OR $8,400 MTHLY)
COUPLE HAS A JOINT BANK ACCOUNT-SALARIES GO IN HERE. MRS. MANAGES THE BUDGET.CREDIT CARD USED – PAID IN FULL.
THEY ARE PAYING WEEKLY RENT OF $ 495 FOR A 3 BEDROOM HOUSE IN CENTRAL AUCKLAND.CLOSE TO SCHOOL FOR THE KIDS.
AFTER THE MONTH’S GROCERY EXPENSES AND ALL UTILITY BILLS, PAY TV,PETROL, BUS,LIFE & OTHER PERSONAL INSURANCE, CONTENTS & CAR INSURANCE ETC COSTS ARE MET;THEY HAVE SAVED APPROXIMATELY $800 IN YOUR BANK ACCOUNT. MRS. ALSO HAS PUT AWAY ANOTHER $200 INTO AN ACCOUNT THAT NOBODY IS AWARE OF OR YOU SAVE IT AS CASH.
LET’S WORK THAT OUT –
RENT @ $495
 X 52 WEEKS = $ 25,740
SAVINGS @$ 800 PER MONTH SAVED =                                   $   9,600
ADD THESE UP NEHA? $35,340 OR SAY $ 35,000 FOR THE YEAR.
THIS IS WHAT THIS FAMILY SHOULD BE IDEALLYLOOKING TO REPAY AS THE MAXIMUM LOAN INSTALMENT PROVIDED YOU DO NOT HAVE ANY BORROWINGS CURRENTLY OR OTHER SPENDING PLANS IN THE FUTURE.
THIS FIGURE OF $ 35,000 REPRESENTS 28% OF GROSS ANNUAL INCOME.
WHAT LOAN AMOUNT REPAYMENT DOES THIS REPRESENT AT CURRENT VARIABLE RATES - APPROXIMATELY $450,000 @ 5.75%?OVER 25 YEARS.
NEHA, CAN YOU GUARANTEE INTEREST RATES WILL REMAIN THE SAME?
INTEREST RATES WILL INCREASE –
LET’S TAKE 7.50% AS THE EXAMPLE –
THE LOANAMOUNT IS APPROXIMATELY $415,000 BASED ON 7.50% OVER 25 YEARS.
I WOULD ADVISE THE FAMILY TO SETTLE FOR THIS LOAN AMOUNT OR EVEN LOWER THAN THISIF I CAN FIND A SUITABLE PROPERTY.
BUT CAN THE FAMILY FIND A SUITABLE PROPERTY AT THIS PRICE LEVEL?
HOWEVER, BANKS WILL LEND THE FAMILY MORE THAN $450,000 IF THE FAMILY APPLIES FOR THIS AMOUNT.
 IN THIS SITUATION, THE COUPLE CAN EVEN GET A LOAN APPROVAL FOR $600,000 ON A 5% DEPOSIT.
MORE NEXT WEEK ON AFFORDABILITY.







30.08.2011
LAST THURSDAY, AS AN EXAMPLE, WE DISCUSSED THE FAMILY IDEALLY BORROWING $ 450,000 AS IDEAL BASED ON THEIR CURRENT CIRCUMSTANCES – 2 WORKING ADULTS WITH 2 SCHOOL KIDS. JOINT EARNINGS $125,000 PER ANNUM.PAYING $495 PER WEEK AS RENT.NO DEBTS.
WHAT WILL REPAYMENTS BE ON $450,000 OVER 25 YEARS? NEHA -PLEASE NOTE THAT I AM NOT RECOMMENDING 30 YEARS.
CURRENT VARIABLE RATE IS $5.75% - REPAYMENT IS $652.11 PER WEEK OR $2831 PER MONTH OVER 25 YEARS ON $450,000 LOAN. THE LOAN INSTALMENT IS A BIT HIGHER THAN THE RENT PAID.
WHAT HAPPENS WHEN THE INTEREST RATE INCREASES?
WHAT WILL REPAYMENTS BE IN 2 YEARS TIME IF INTEREST RATES ARE AT A HIGHER LEVEL – SAY 7.50%.
REPAYMENT WILL BE $ 789 PER WEEK OR $3426 PER MONTH.
CAN THE FAMILY AFFORD THIS LEVEL OF REPAYMENT?IF THERE HAS BEEN NO DROP IN EARNINGS AND IF THE FAMILY HAS TAKEN ON NO MORE DEBT, THEY CAN SERVICE THE BORROWING COMFORTABLY.
WHAT IF INTEREST RATES INCREASE TO 8.50% IN 3 YEARS TIME?
WHAT WILL REPAYMENTS BE?
$868 PER WEEK OR $3773 PER MONTH OVER 22 YEARS.
THE WEEKLY INSTALMENT IS NOW ALMOST DOUBLE THE RENT-$495.
CAN THE FAMILY AFFORD THIS? IT IS BECOMING A BIT TIGHT NOW.
31.08.2011 – did not complete on account of Ramzan
01.09.2011
WE WILL CONCLUDE THIS EXAMPLE TODAY.
TUESDAY WE BRIEFLY TALKED ABOUT REPAYMENTS ON A $450,000 LOAN WHEN INTERESTRATES RISE FROM 5.75% TO 7.50% TO 8.50%.
LET’S ASSUME THE FAMILY WAS PRE-APPROVED A LOAN OF $600,000.
THE FAMILY DOES NOT LOOK FOR A SUITABLE PROPERTY IN THE PRICE RANGE OF $450,000 PLUS DEPOSITAS THEY NOW HAVE A BIGGER LOAN AMOUNT PREAPPROVED.
THIS LOAN AMOUNT MEANS A BIGGER &HOPEFULLY BETTER PROPERTY.
THE BUDGET IS NOW FORGOTTEN (TO BRING OIL) AS THE DREAMS OF A BIGGER PROPERTY COME INTO THE PICTURE.
THIS IS HUMAN NATURE. WEAKNESS FOR BIGGER /HOPEFULLY BETTER.
IF THE FAMILY TAKES ON A LOAN OF $600, 000, WHAT WILL CURRENT MONTHLY REPAYMENTS BE ON THIS LOAN?
THE REPAYMENT WORKS OUT TO $869PER WEEK OVER 25 YEARS ON THE CURRENT VARIABLE RATE OF 5.75%.
FAMILY HAS MADE A FEW ADJUSTMENTS TO FIT IN THIS REPAYMENT. (REMEMBER, FAMILY WAS PAYING RENT OF $495 PER WEEKAND THE FAMILY WAS SAVING APPROXIMATELY $800 PER MONTH)
WHAT WILL REPAYMENTS BE WHEN INTEREST RATES INCREASE ON THIS LOAN OF $600,000? AS I MENTIONED EARLIER, INTEREST RATES WILL INCREASE WITH TIME.
WHAT WILL WEEKLY REPAYMENTS BE IN 2 YEARS WHEN THE INTEREST RATE HAS REACHED 7.50% & 8.50%?
WEEKLY REPAYMENTS WILL BE $1051.71@ 7.50% AND OVER $1150 PERWEEK @ 8.50%(RENT WAS $495) AND ARE MUCH MORE THAN DOUBLE THE RENT PAID.
THIS IS NOW EQUAL TO 44% OF GROSS ANNUAL INCOME (ASSUMING INCOMES HAVE NOT DROPPED AND ARE AT SAME LEVELS AS WHEN THE LOAN WAS TAKEN) OR 55% OF NET ANNUAL INCOME
CLOSE TO 60% OF NET MONTHLY INCOME @ 8.50%.
THE COUPLE EARNS $8400 NET PER MONTH & $4560 PER MONTH IS GOING TOWARDS THE MORTGAGE PAYMENT.
HOW DO YOU AVOID THIS SITUATION? CAN YOU AVOID THIS SITUATION?
YOU CAN AVOID THIS BY MAKING A BUDGET AND STICKING TO IT.
MORE ON MORTGAGES NEXT WEEK.














MANAGING DEBT
In the last few years more people have found themselves challenged with debt.
Sadly in the society we live in, it has become way to easy to get credit and we have become a nation of spenders. The latest stats are that we are spending $1.02 for every dollar we earn.
That's well down on a few years ago when we were spending $1.15 for every dollar we earned however it's still not that great. Ideally as a nation we should be spending less than we earn and saving the difference.
If you are worried about your credit rating you can go to www.mycreditfile.co.nz and there is a form that you can complete called the Request for Access to Your Personal Credit File or My Credit Alert.
There are both free and charged for options. It worth having a look at what history there is on you, whether you think there may be an issue or not.
You cannot change your current rating so the best thing is to focus on getting on top of your debts so in the future you can improve your rating.

Here are some tips:
1. Understand what your total debts are
This may seem obvious but I've often found with that when people sit down and add up all their debts what they thought they owed can often be quite different from the reality.
2. Understand the details of what you owe
Make a list of all of your debts:
• who do you owe
• how many payments do you have to go
• what are the interest rates
• are there restrictions with paying any of them off earlier (common with car loans)
• are their any balloon payments (large payments at the end)
• does the interest rate increase if you haven't paid off the loan within a certain period
• what are the minimum payments
3. Establish how much you can pay off
To do this you will need to do some kind of budget so you know how much spare money you have each week/month to put towards your debts.
4. Develop a payment plan
When you have all the information you need you can work out a plan of HOW you are going to tackle paying of your debt.
5. Be strategic about what you pay off
If you have extra money that you can put towards fast tracking your payments and you have met all of your minimum payments then pay off debts with the highest interest rate first. Once that debt has gone, start on the next one and so on.
6. Remove temptation
It's not much use putting all that work into paying off your debts if you are going to rack them up again. Find another hobby other than shopping and put your credit card somewhere you can't get easy access to it.
7. Negotiate with your creditors
If you are behind in your payments communicate with your creditors. Usually they will be okay if you keep them in the loop, but make an effort and do what you say you are going to do.
8. Avoid late payments
Try to keep on top of all debts so you don't incur any additional fees and charges.
9. Monitor and review
Keep an eye on your progress and adjust your plan when necessary. Keep track of how much you are paying off as this can be very motivating.

read more

Tips for Home Load Application

Tips to assist with your home-loan application

WE CAN ASSIST YOU EVEN IF YOU ARE NOT IN AUCKLAND

  • File all local bank statements- + overseas statements (copies cost)
  • Always keep current 6 months statements ready.
  • If your deposit has come from overseas, get your paperwork organized early to save time / stress
  • Conduct your bank account within limits (with or w/out o/d)- do not go beyond available balances
  • Ensure all automatic payments & direct debits are honored. Have a good excuse for missing out on a payment. Keep track of related events.
  • Try and reduce the number of operational accounts-save on fees + additional paperwork – also makes managing account simpler, lesser paperwork
  • If you have a credit card, use it wisely-pay in full every month & file statements
(u r paying fees for the credit card-use the credit card wisely)

  • Pay credit card bills on time – even if you have to just make the minimum payment
  • Try not to have more than 1 credit card
  • File your credit card statements
  • Try not to borrow externally unless essential for your day-to-day living
  • All forms of borrowing can hurt your application and your borrowing ability, your deposit and your repayment ability
  •  Do not guarantee a 3rd party loan or hire purchase account
  • Keep your credit file CLEAN
  • Get all your income coming to your bank account-even if u r paid in cash
  • Do not change jobs too often – if you do , justify reasons for changing jobs
  • File all pay slips/contracts, employment offer letters
  • Copies of your id to be kept handy-passport/drivers license
  • If boarding or renting, try and pay through your account
  • If receiving board, receive through your account
YES…BEFORE HOUSE-HUNTING GET YOUR LOAN APRE-APPROVED

CALL MORTGAGE MANTRA.THESE ARE JUST A FEW TIPS…MORE IN THE WEEKS TO COME.
________________________________________________________________________

CAN NOW BORROW 95% OF PP AND LEF CAN BE CAPITALISED

 NEW AGENCY STARTING TO SELL PROPERTY, CHARGING ONLY 2.95%.

HOUSE SALES IN NZ 3252(3666) IN JANUARY 2011, IN AUCKLAND 1115(1428 IN DECEMBER 2010) 4397 IN DECEMBER 2010.
read more

Seek help on Paying Off Mortgage


HOW OFTEN DO YOU VISIT YOUR DOCTOR, SOLICITOR OR ACCOUNTANT? WHENEVER YOU HAVE A PROBLEM OR DISCUSS A SITUATION/SOLUTION.

A FEW PEOPLE DO EXPERIENCE PROBLEMS WITH THEIR HOME LOANS BECAUSE OF VARIOUS REASONS LIKE:

·         LOSS OF JOBS
·         DROP IN INCOME/S
·         ILL AND UNABLE TO WORK
·         TENANT NOT PAYING RENT ON TIME OR NOT PAYING AT ALL
·         INTEREST RATES HAVE INCREASED BEYOND EXPECTATIONS
·         HAVE BORROWED TOO MUCH ELSEWHERE AND CANNOT MANAGE
·         FAMILY SITUATION HAS CHANGED

SOLUTIONS ARE NOT EASY BUT SOME OPTIONS ARE:
·         FIRST TALK WITH IMMEDIATE FAMILY / CLOSE FRIENDS& ASK FOR THEIR HELP….IN ANY FORM
·         TALK TO YOUR LENDER / BROKER/ADVISER
·         NEGOTIATE RATES
·         CHECK IF YOU CAN GO INTEREST ONLY ON LOAN
·         INCREASE TERM OF LOAN
·         ASK FOR MORTGAGE REPAYMENT HOLIDAY (PRINCIPAL INCREASES)
·         DO A 2ND&/ OR 3RD JOB OR CHANGE TO A BETTER PAYING JOB
·         TAKE ON A BOARDER/S
·         CONSOLIDATE OTHER BORROWINGS WITH HOME LOAN, IF POSSIBLE
·         DELAY,POSTPONE OR CANCEL ANY HOLIDAYS PLANNED
·         REVIEW PERSONAL EXPENSES – FUEL,PAY TV,EATING OUT,CLOTHING,JEWELLERY
·         STOP BORROWING ELSEWHERE


IF ALL OPTIONS HAVE BEEN EXPLORED AND NO RESULT OBTAINED, YOU MAY BE BEST ADVISED TO SELL BEFORE THE SITUATION WHERE THE LENDER HAS TO SELL (MORTGAGEE SALE)




read more

Rising Rent in Auckland


quoting from online sources
Rents in Auckland reached their highest recorded level in March, increasing by $32 on February to $434, according to the latest Barfoot& Thompson sales data.
Over Marchaverage rents rose 4.7%(seasonally-adjusted)over February, up 8.2% on year-ago levels.
March data was "unequivocally strong", with seasonally-adjusted turnover up 11.4% on February - the strongest turnover in 15 months - and the average sales price rising to a record $581,190.
"When youcombine the increase in weekly rents with the rise in property prices, it flags that accommodation in Auckland is in short supply,"We discussed this only last week.
"The rental increase also coincides with landlords reacting to the new taxation rules around investment property, and firmly fixing their focus on improving the operating return from rents."
New listings were also up 5.5% on the month, though down 7.3% on year-earlier levels.
Total listings declined 2.7% from February, and are down 7.3% on year-earlier levels.
Average selling price was upbecause ofhigh number of very expensive property sales.
"Barfoot& Thompson sold 14 homes valued at more than $2 million in the month, which compares with four in March 2010. Furthermore, there were 89 sales over $1 million, which is the highest level sinceMarch 2007," the report said.
The company cited demand issues for the rise in prices and rents.
"The big lift in average rent shows thatdemand for property to rent is high.
We expect that rents will remain high over the year ahead, as demand remains high, and the low level of construction over recent years limits the overall housing stock."
Westpac said that while rent averages can be a volatile measure, "the latest result indicates that the anecdotes of ‘rental market madness' in Auckland may have more substance than we thought."
Thompson said that despite the rise in prices, he didn't believe another housing market bubble was forming."Rather, March may represent when confidence returned to the Auckland housing market with values stabilising."
IF YOU HAVE NOT YET BOUGHT YOUR FAMILY HOME- IT MAY BE A GOOD TIME NOW-
·         LOOK AT 95% BORROWING – YOU REQUIRE ONLY 5% (SAVED OVER 4-6 MONTHS)AND  YOU CAN INCLUDE KIWISAVER CONTRIBUTIONS( YOUR CONTRIBUTION + EMPLOYER CONTRIBUTION+ MAY BE ELIGIBLE FOR A GOVT. SUBSIDY OF UP TO $5K)

·         STRONG AND STEADY WORK HISTORY  -  GOOD BANK ACCOUNT CONDUCT

·         LITTLE OR NO EXTERNAL DEBT           -  CLEAN CRA FILE

·         ONLY BASE INCOME INCLUDED – NO BONUS OR OVERTIME

·         CAN GET 30 YEARS BUT I WOULD ADVISE AGAINST THIS TERM

·         JOINT APPLICATION POSSIBLE – CRITERIA AND TERMS APPLY

·         MINIMUM INCOME CRITERIA APPLIES WITH DIFFERENT LENDERS
·         MINIMUM SURPLUS CRITERIA APPLIES WITH DIFFERENT LENDERS
read more

Review Your Current Situation


WHEN DO YOU VISIT YOUR DOCTOR,SOLICITOR AND ACCOUNTANT?
TO DISCUSS A HEALTH CONDITION OR A LEGAL PROBLEM.

SOME OF US EXPERIENCE PROBLEMS WITH OUR FINANCES BECAUSE:
·         JOBS ARE LOST – REDUNDANCY COVER
·         DROP IN INCOME/S – 2ND JOB OR CHANGE JOB
·         ILL & UNABLE TO WORK- MORTGAGE / INCOME PROTECTION
·         TENANT NOT PAYING RENT ON TIME –
·         HAVE NOT PREPARED/BUDGETED FOR INTEREST RATE INCREASE
(ESPECIALLY DIFFICULT WHEN A JOB IS ALSO LOST SIMULTANEOUSLY)
·         BORROWED BEYOND OUR REPAYMENT ABILITY ELSEWHERE
·         FAMILY SITUATION IS NOW DIFFERENT – FAMILY HAS SPLIT OR A BREAD-WINNER IS NOW LIVING SEPARATELY

WHAT ARE THE OPTIONS?
·         DISCUSS SITUATION WITH FAMILY & TRUSTED FRIENDS – ASK FOR HELP
·         TALK TO BROKER/LENDER-ASK FOR HELP
·         CHECK OPTIONS ON LOAN –
·         INTEREST ONLY, LOAN REPAYMENT HOLIDAY,TERM OF LOAN(LAST)
·         LOOK FOR ADDITIONAL INCOME SOURCE/S
·         DO A 2ND AND/OR 3RD JOB
·         TAKE ON A BOARDER
·         CONSOLIDATE ALL BORROWINGS WITH HOME LOAN,IF POSSIBLE
·         CANCEL ALL HOLIDAYS & OTHER UNIMPORTANT SPENDING
·         REVIEW BUDGET AT HOME – SKY/VISION/EATING OUT/CLOTHING…BUT PLEASE DO NOT CUT BACK ON INSURANCES
·         STOP BORROWING ELSEWHERE

IF ALL AVAILABLE OPTIONS HAVE BEEN INVESTIGATED AND NO SOLUTION IS IN SIGHT, SELL BEFORE THE BANK SELLS….MORTGAGEE

IF YOU DO NOT ASK FOR HELP, YOU WILL NOT GET ANY HELP

BUDGET
BUDGET
BUDGET

CHECK BUDGET WEEKLY & MONTHLY
CHECK BUDGET BEFORE SPENDING
read more

Plan Your Mortgage


What if you could pay off your 30 year mortgage in 25 years or 20 years or 15 years or even 10?
Everyone wants to be debt-free; it is the time frame that makes it so challenging and difficult.

It’s easier than you thinkHowever, most people won’t achieve it because they fail to set goals or take action.

Most of us end up working for our mortgage.
We are busymanaging our debt andbuying stuff that will break or be out-of-date in a year.

The easiest your mortgage will ever look is just before you buy.
Once you move in with your mortgage, reality sets in fast.
The budget you did (as you planned new paint colours and new furnishings + the new 50 inch TV) begins to look extremely optimistic!
Banks want you to repay your mortgage andthink that they can figure out how much you can really afford. They do not know what you have planned for after taking on the mortgage.
Budgetingneed not be difficult.  A simple short cut is to look at your rent and savings.

For example, $500 per week in rent and $1,000 per month in savings is equivalent to the repayments on a mortgage of $430,000 at an interest rate of 7.50%.

When you apply for finance the process is backward looking. The focus is on demonstrating that you can pay the mortgage. Looking backward however ignores the traps that can lie ahead.

Think of the new paint + furnishings+TV + new car that you had thought of but never put down in your budget.

However if you plan ahead, this can be incorporated into your mortgage planning.

At Mortgage Mantra we do that by sitting with you and looking at how quickly we can reduce the mortgage to a point where you can afford it on one income.
OR
Wecan help you build a savings buffer you can use. If you can plan that into your mortgage from the start then it becomes easy.
The other option would be to only borrow what you can afford on one income, but how realistic is that? In Auckland the borrowing power of one income will get you somethingin a “socially challenging” part of town.

No matter what your circumstances, or what you’re planning on doing, the mortgage is always the elephant in the room.

One simple rule that will get you ahead is to pay a bit extra, even if that is only $50 per week. On a $400,000 mortgage paying an extra $50 per week will drop 4 years off your mortgage and save you $79,000 in interest.

Even better, you can hammer your mortgage by feeding it half of any future salary increases.  Wage inflation is typically running at about 3 %(?????)And your income tends to increase faster than this with age and experience. This approach is painless because you haven’t had a chance to spend it yet!If every year you give up 50% of any wage increase to the mortgage you will take approximately 8 years off your mortgage.

So almost all homeowners can pay off their mortgage in less than 15 years, it just requires a bit of planning and action. It does not require a magician who will charge you thousands of dollars.
read more

Paying Debt is Best Bet


Paying debt best bet - usually
WE DO NEED TO SAVE…THERE IS NO DEBATE ABOUT THIS.

pay down your debt" (thereby reducing net liabilities), before committing to medium- and long-term saving for retirement, or in continuing contributions to KiwiSaver for your kids after grabbing the $1000 kick-start?

IT IS IMPORTANT TO PAY DOWN YOUR MORTGAGE. NO DEBATE.

BUT IF YOU HAVE OTHER DEBTS ALONGSIDE WHICH ARE AT HIGHER INTEREST RATES, WHAT DO YOU DO? Examples include personal loans, hp, credit card debts, and car loans are examples of high costs.PAY THE HIGHER RATE DEBTS FIRST OR CONSOLIDATE.

Over the years debt repayment could make quite a difference to your liabilities situation and to individuals' wealth.

A basic financial "rule" is: pay off debt as fast as possible - unless you feel confident that you can earn a higher return in an investment than the interest charged on the debt.

Paying 6.5 per cent on a mortgage while earning 3.5 per cent in a savings account leaves you going backwards. Generally you can't make a return on savings - after fees and tax - that's higher than mortgage interest rates without taking considerable risk.

However, there's an important exception - KiwiSaver. The scheme's incentives - the $1000 kick-start, tax credits of up to $1043 a year and, for employees, contributions from employers - boost the return so that for most people it's higher than mortgage interest rates. If you are worried about risk, you can invest in a low-risk KiwiSaver fund.

It's best for mortgage holders to contribute just 2 per cent of their pay to KiwiSaver - topping it up to $1043 a year if necessary, to get the maximum tax credit. Any further savings are best put into mortgage repayments or other high cost debts.


EMERGENCY FUNDS?
read more

Negotiating the Purchace Price


Negotiating the Purchase Price

 It is a buyer’s market. What does that mean when it comes to negotiating the purchase price? How do you make sure you get a great deal? 

Negotiating the Price

Price is property- and vendor-dependent. On one hand, less desirable properties (and properties requiring a quick sale) are consistently selling for 20% below historic values. On the other hand, “hot” entry-level properties in good suburbs appear to be down only about 10%. 
First things first. Know yourself. It helps to write down your goals and what you are prepared to negotiate – or not! 

How to Use Time
  • Put limited time frames on offers.
  • You can only have one offer live at a time. Let the agent know that you want to put an offer on another place. 
  • Be cautious about making unconditional offers (but only if you have finance approved already). 
  • Do a short settlement. This can be an emotional benefit to seller (they can “move on”). 
How to Use Information
Information is all about putting yourself in the vendor’s shoes. Given the vendor’s situation what would you do? 

How much equity is sitting in the property value? And how much do you think they would give up? (After all it’s just “paper” profits.) 
Sellers will more readily give up profits than suffer a loss. Sellers who have owned for over seven years (and older sellers) are likely to have substantial profits built in. If they are upgrading they are likely to have also got a great deal on their new purchase. 

How keen is the seller? Is the house empty? If so, for how long? Is the seller moving? Have they purchased somewhere else? Are they going through a divorce? Has the seller over-committed? Do you think they are in a position to sit out the current market, if they can’t sell? 
The clues to look out for are empty houses, incomplete projects, and properties without the necessary building consents (for example an unconsented garage.) Clients that find urgent sellers and sellers with “tricky” properties are buying a full 10% lower than other buyers (so 20% or more below historic values.) 
Some properties will be harder to get a mortgage on – so these will have limited potential buyers and are more open to negotiation.  These include: bare land, apartments (generally but especially apartments under 50m2), anything leasehold (but be careful!) and properties without a code of compliance. 
Sellers who are selling and buying in this market should obviously sell before they buy. Talking with experienced investors, you are best to meet the market quickly and recognize that you’ll win on the other side of the transaction.
read more

Kiwi Saver


KIWI SAVER
Retirement savings scheme / useful for 1st home buyers as well

·         OPEN TO ALL NZ CITIZENS/RESIDENTS

·         FROM NEW BORNS TO AGE 65

·         IF U R UNDER 18,NEED PARENT/GUARDIAN CONSENT

·         SHOULD HAVE AN IRD NUMBER

·         KICK-START TAX-FREE AMOUNT OF $1,000 FROM THE GOVERNMENT

·         AFTER  18, GOVT. GIVES TAX CREDITS UP TO $1042 P.A./ $20 WKLY
AS LONG AS U CONTRIBUTE $1042 P.A.

·         EMPLOYER HAS TO CONTRIBUTE 2% TO MATCH YOUR CONTRIBUTION

·         1ST HOME DEP SUBSIDY AFTER 3 YEARS CONTRIBUTIONS-$1K P.A.

·         UP TO $5,000 1ST HOME SUBSIDY AFTER CONTRIBUTING 5 YEARS

·         FIRST HOME SAVINGS WITHDRAWAL

·         AUTOMATICALLY ENROLLED BY EMPLOYER IF NOT MEMBER

·         IF NOT EMPLOYED,U CAN MAKE REGULAR OR LUMP-SUM CONTRIBUTIONS

·         IF SELF-EMPLOYED, U CAN STILL ENROL AND MAKE YOUR CONTRIBUTIONS & GET TAX CREDITS UP TO $1042 P.A.

·         Starting on taxable pay of $45,000, from age 40 until 65:
Employee KiwiSaver contributions
2%
4%
8%
$202,857
$275,773
$418,680
$123,648
$168,092
$255,198
Amount you will invest weekly in first year
$17
$35
$69
Employer weekly contributions
$17
$17
$17
Tax credits in first year (paid on 1 July)
$640
$742
$742
Maximum tax credits in future years
$1,043
$1,043
$1,043

 

starting on taxable pay of $45,000, from age 30 until 65:

Employee KiwiSaver contributions
2%
4%
8%
$443,597
$607,472
$929,981
$221,811
$303,753
$465,016
Amount you will invest weekly in first year
$17
$35
$69
Employer weekly contributions
$17
$17
$17
Tax credits in first year (paid on 1 July)
$640
$742
$742
Maximum tax credits in future years
$1,043
$1,043
$1,043
Assumptions
1.      Salaries increase at 3.5% per annum. Your contributions are assumed to increase in line with your pay (for example $200 today will be $230 in 4 years time).
2.     All contributions are invested in a balanced fund earning a net real return of 4% per annum.
3.     No contributions holidays are taken.
4.     The one-off government contribution of $1,000 is received 3 months after the first contribution is deducted from your pay.
5.     Tax credits (for a maximum of $1,042.86) are added to your savings each year.
6.     This calculator assumes your investments are in a managed fund which is a PIE (Portfolio Investment Entity). Your PIE income is taxed at either 10.5%, 17.5% or 28%, depending on your income.Find out more about PIEs.


read more

Getting Insurance for your home


PREPARING FOR THE UNEXPECTED

  • THE SOUTH CANTERBURY FINANCE FAILURE-GOVT. WAS PREPARED WITH THE DEPOSIT GUARANTEE
  • THE CANTERBURY EARTHQUAKE – GOVT. & CITIZENS NOT PREPARED…ANYONE CAN PREPARE FOR A CALAMITY..LUCKILY NO LIVES HAVE BEEN LOST
THERE ARE HUNDREDS OF FAMILIES THAT DO NOT CURRENTLY HAVE THEIR HOMES INSURED. REVIEW YOUR SITUATION IMMEDIATELY.

WHAT HAPPENS TO YOUR HOME IF IT IS AFFECTED IN AN EARTHQUAKE OR STORM OR ANY OTHER CALAMITY? IF YOUR HOME IS INSURED, YOU WILL HAVE SOME RELIEF. IF YOUR HOME IS NOT INSURED IN SUCH A CALAMITY, WHAT ARE YOUR OPTIONS? THINK THIS OVER.

MANY OF US INSURE OUR CARS- NOT OUR HOMES / LIVES/HEALTH.

LET’S BRIEFLY TALK OF (HEALTH) INSURANCE TODAY:

YOU CANNOT ALWAYS PREDICT WHAT HEALTH ISSUES MAY AFFECT YOU IN THE FUTURE.

YOU ALSO CANNOT FORESEE HOW THESE ISSUES MAY IMPACT YOUR LIFESTYLE, FAMILY AND EARNING ABILITY.

AN INDIVIDUAL HAS A 52% CHANCE OF HAVING ONE OF THE FOLLOWING OPERATIONS BETWEEN THE AGES OF 30 & 65:
FIGURES ARE AS OF EARLY 2009
CATARACT REMOVAL - $4K

HIP OR KNEE REPLACEMENT-$15K - $22K

HEART PROCEDURES

(INCLUDING VALVE REPLACEMENT-$40-$50K

CORONARY BYPASS-$30-$40K

ANGIOPLASTY -$20K ONWARDS & ANGIOGRAM - $4K ONWARDS)

HERNIA REPAIR - $6K - $10K

PROSTATE (INCLUDING TREATMENT/REMOVAL)-$8K - $13K

HYSTERECTOMY - $12K - $19K

GALL BLADDER REMOVAL - $5K-$8K

ENDOMETRIOSIS- $8K-$16K

HERCEPTIN TREATMENT FOR BREAST CANCER - $100K P.A.


5 BENEFITS OF HEALTH INSURANCE

  • CHOICE OF WHEN, WHERE & HOW YOU GET TREATED IN CONSULTATION WITH YOUR GP
  • NO STRESS ABOUT HOW TO ARRANGE TO PAY THE MEDICAL BILLS
  • AVOID LONG DELAYS IN THE PUBLIC SYSYEM
  • COVER NOW FOR UNKNOWN HEALTH ISSUES THAT MAY ARISE IN FUTURE
  • ACCESS TO LATEST MEDICAL TECHNOLOGY & PROCEDURES
50% OF HEALTH INSURANCE CLAIMS ARE BETWEEN THE AGES 30-59.

WOMEN AGED 30-49 – GYNAECOLOGICAL, AGED 50+ BREAST CANCER, BOWEL CANCER & JOINT REPLACEMENT

MEN AGED 30-49- SKIN, PROSTATE OR COLON CANCER, AGED 50+ HEART RELATED PROCEDURES ARE MOST COMMON

CHILDREN – TONSILS, ADENOIDS, GROMMETS IN EARS
read more

5 easy ways to buy a home


Five Ways to Make Buying a Home Easier

Buying your first house can be scary,but you can make it easier on yourself by following some simple rules.  Here are five things to do upfront:

 1.  Get pre-approved 
 A preapproval is simply an indication of what you can borrow and gives you a feel for your repayments and any other costs.  Make sure you understand the term of your mortgage and any additional costs (especially low equity fees) and whether the bank will require a valuation.  (You can get started by doing our online application.) 

 2. Talk to experts 
You might try coercing a real estate agent to act as your buyer’s agent.  That can be useful to get a feel for the market and for properties in an area.  Squirrel can also help you by providing property intelligence and local sales data to help you better understand the market.  We will help you with the whole process and provide useful feedback on the property and negotiating the price.  We’re in the market every day helping buyers.  We know what’s hot and what’s not, and where to find the best deals. 
When it comes to your mortgage don’t settle for second best.  If you can use a top mortgage broker for free, why settle for someone less experienced? 

3. Know the neighbourhood 
Spend time in an area.  Have brunch at a cafe, walk around the shops.  Find out about the schools and public transport.  Go back at night and different times of the day.  I’ve even gone down the street and talked to neighbours. 

 4. Be realistic  
Look at a lot of property.  That way you will get a feel for what’s available and it will make those necessary trade-offs seem easier.  All properties have problems and what you need to decide is: Can you live with those problems in the short term until they can be fixed?  With older houses the roof will often need maintenance, repair or replacement (in the next five to 10 years.) 

 5. Put in offers  
Bugger perfection – there is not one property out there for you.  There are a number of properties out there that would be great at the right price.  If you’re not totally sold on a particular property, at what price would change your mind?  There is no harm in putting in low offers and who knows, it could pay off!  If you are doing low offers don’t bother putting the offer in writing and putting the agent through the whole process.  Just tell them a price you’d be happy to negotiate at – and if it’s ‘No deal’, simply walk away.
read more

How to make buying a home easier


Few things to make buying a home easier

Buying that first home can be scary .Following some simple rules.  Here are 5 things to do.

1.  Get your loan preapproved in advance
A preapproval is simply an indication of what you can borrow and gives you a feel for your repayments and any other costs.  Make sure you understand the term of your mortgage and any additional costs especially low equity fees and whether the bank will require a valuation.  You can get started by doing an application.
WHAT WILL THIS COST? WON’T COSTYOU A CENT.

2. Talk to professionals, friends, experts
Try and talk to a real estate agent to act as your Buyers Agent.  That can be useful to get a feel for the market and for properties in an area.  We can help you by providing property intelligence and local sales data to help you better understand the market.  We will help you with the whole process and provide useful feedback on the property and negotiating the price.  We’re in the market every day helping Buyers.  We know what’s hot and what’s not, and where to find the best deals.
When it comes to your mortgage don’t settle for second best.  If you can use a top mortgage broker for free, why settle for someone less experienced.

3. Know the neighborhood
Spend time in an area.  Have breakfast and/ or lunch at a cafe, walk around the shops.  Find out about the schools and public transport.  Go back at night and different times of the day.  Go gone down the street and talk to neighbors,businesses.

4. Be realistic
Look at a lot of property.  That way you will get a feel for what’s available and it will make the trade-offs that you need to make, easier.  All properties have problems and what you need to decide is whether you can live with those problems in the short term until they can be fixed.  With older houses the roof will often need maintenance, repair or replacement (in the next 5-10 years.)

5. Put in offers
Bugger perfection – there is not one property out there for you.  There are a number of properties out there that would be great at the right price.  If you’re not totally sold on a particular property, at what price would you be?  There is no harm in putting in low offers and who knows, it could pay-off!  If you are doing low offersdon’t bother putting the offer in writing and putting the Agent through the whole process.  Just tell them a price you’d be happy to negotiate at and if it’s no deal, walk away.
read more

Various ways to buy a property


DIFFERENT WAYS TO BUY A PROPERTY – NOT EXHAUSTIVE
·        The most common is through a public listing of a property by a Real Estate Agent open home at set times or with prior appointments – price is negotiated through the agent. You can make a conditional purchase offer through the agent.

Some of the Purchase Conditions are -
  • Subject to finance – 5 to 10 working days
  • Subject to building inspection
  • Subject to LIM report
  • Subject to solicitors approval – 3 working days (insert this if you are not confident about what you are signing)
·         Another popular clause is a Due Diligence clausethat gives you full control on the purchase process but isn’t nearly as popular with Agents for this reason.

·         REMEMBER it is a legal contract. Talk to a solicitor before signing the contract.Once you go unconditional you are committed to purchasing the property.

·        Tender

You put in a written offer within a specified timeframe which the seller considers at the same time as any other written offers.

You can put conditions on the offer but this might make it less appealing than other offers.
08.09.2011

·        Private Treaty / Private Sale

This is where you buy by negotiation directly with the vendor.

Good negotiationis about doing your research.

·         REMEMBER, YOU DO NOT HAVE AN AGENT TO GIVE YOU INFORMATION ABOUT THE PROPERTY IN THIS SITUATION.

·         YOU NEED TO RESEARCH HISTORIC SALES DATA YOURSELF.

·         These transactions have the risk of something going wrong because there is nobody to manage the process. Please involve your solicitor and any experienced friend or family member.

·         If you buy privately a Registered Valuation will almost always be required and you should insert a solicitor’s clause (e.g. “subject to solicitor being happy with the contract in all regards within 3 working days”) or have your solicitor check the agreement before you sign it.

Private treaty / sale can be conditional.

Auction
·         An auction is an unconditional purchase.

·         This means you need to have done all of your due diligence upfront.

·         The Real Estate Agent will provide you with a copy of the S&P agreement, Title and LIM report upfront.

·         You may need to do a building inspection and/or valuation before the auction, which can become expensive if you keep going to auctions.
You need to register your interest in an auction before the day and you will need a 10% deposit that is payable on winning the auction. How do auctions work?
Auction check list
  • Register your interest with the agent before the day
  • Arrange your deposit – you need a 10% deposit
  • Agree any changes to the deposit or settlement day with the Agent before the auction
  • Have your solicitor check the title
  • Get your finance fully approved
  • Read the LIM report and do any other due diligences
  • Do a building inspection or valuation (if required)
Auction can be requested by the Vendor or it can be a Mortgagee sale
Sale and Purchase Agreements
Once you find a place you’ll be asked to sign a Sale and Purchase agreement. This is largely template driven with space to insert your own purchase conditions. We’ve outlined the main conditions below.
Important Dates
  • finance date – 5 to 10 working days from offer date
  • settlement date – the day you take ownership of the house
Paying the Deposit
Often you will not have the deposit available when you buy a property. This can cause some stress around unconditional date so I thought I’d outline the rules and process:-

The amount of a deposit is completely negotiable.
With an auction it is set at 10% but you can negotiate with the Real Estate Agent before the auction if you do not have 10% available. Agents/vendors want as many bidders as possible at the auction so will generally agree to a lower deposit.
With private treaty (by negotiation) sales you set the figure as part of signing the S&P agreement. 5% is usually enough. With bigger purchases you can usually cap the deposit at a set amount, say $25k.

When is the Deposit Paid?
You normally agree to pay the deposit on going unconditional. Occasionally Real Estate Agents ask for the deposit upfront but this is not as common.

If you do not have funds available we will set up a temporary overdraft or draw down the funds on your existing property to form the deposit.

Although it is best to pay the deposit on unconditional day this is often not possible due to the amount of paperwork required to get temporary facilities in place – especially if you are a first home buyer. In this situation you can go unconditional, and as a courtesy let the Agent know that the deposit will be paid within 48 hours.

Always check with your solicitor – you have 3 working days from being served notice (by the vendor’s solicitor) to pay the deposit. This means you have at least 3 working days from going unconditional to pay it.

Building Inspection and Valuation
Once you’ve signed a sale and purchase agreement we can arrange for a building inspection and valuation and have these available for you prior to going unconditional. 

LIM Reports
A LIM report is prepared by the council and is based on its property records. It will tell you whether or not the property has the right consents and a code of compliance. We do not arrange LIM reports. If you want a LIM report you will need to order it from your Council. It costs around $150 and takes up to 10 days so order it immediately after signing the Sale and Purchase agreement. Alternatively you can check the council’s property file yourself.

The Lawyer and Signing Contracts
Your Lawyer is an important part of the house buying process. The first question you need to ask yourself is what level of service you require. There is a massive range of Lawyers out there both in terms of quality of service, quality of advice, and cost.

If personal service is important then as one client put it, pay extra and go to a reputable law firm. There are also a number of low cost transactional services available. These work well provided you do not need advice or lots of reassurance. Your lawyer will manage all dealings with the vendor (i.e. confirming that you would like to go unconditional), they check that the title of the property is clean, run through the mortgage documents with you, and settle the funds.

If you are outside of Auckland or Overseas, they will courier the mortgage documents out to you to be signed in front of a Justice of the Peace or Public Notary. For non-residents you do not need to come to New Zealand to buy property. Just allow enough time for us to manage the paperwork back and forth.

Buying a Property – Use a Due Diligence Clause

Buying a house is an exciting and frightening thing.
Exciting - for all the obvious reasons.
Frightening too because you may discover unpleasant things: “Did you hear about Chris who bought a house and then found out some horrible things but could not get out of it?”

“Unpleasant things” could be:
·         Water-tightness issues
·         An inability to find finance
·         An unnoticed drain running very near the house
·         Discovering it was prone to flooding
·         Finding out that those alterations to the house were done without a permit and may need to be demolished.
All of these things – and more – can be avoided with the right clause inserted in the sale and purchase agreement before you sign it.

It is a known fact that real estate agents put a lot of pressure on you to sign a purchase contract – preferably an unconditional contract – to get the best deal for their client, the vendor.

Having said that, it is the agent’s skill and training that will pull the deal together.  The agent gets you to pay as much as you can afford and gets the vendor to accept as little they can afford to sell for.

Almost all agents do a great job for their vendors and we enjoy working with them.
But what should you do when you are making an offer? 
The prudent and wise thing to do is to have as few conditions in the agreement as possible, but make those conditions effective.  They need to give you maximum possible protection so that if you find any “horrible things” you can walk away.

The clause we recommend is a clause called “due diligence”.
We recommend that you get the agent to insert it in the contract as clause 15.
Once the vendor has signed the agreement this clause requires you to do everything you can to confirm this contract. It does not just allow you to change your mind later and walk away.

You must make inquiries of your bank and other sources of finance to find finance that you can afford.
It allows you to get a building consultant to go through the property and give you a report on its conditions. We strongly recommend that you do this. You are also required to contact the local council and check on permits and consents for the house. You can also have a valuer determine in their opinion the value of the house and give you a written report. This clause allows you to carry out whatever investigations you think you need to do.

If as a result of these inquiries and reports something horrible does come up, you can walk away from the agreement. You must then advise the vendors that the contract is at an end.

This clause does not cover the situation where you have a house to sell. If you have to sell your own house then you must put in a clause which covers that. The agent will have a clause that will do the trick. But make sure that the agent does insert this clause in before you sign the contract.

These are the magic words to create a “horrible things avoidance clause”:
DUE DILIGENCE CLAUSE
This agreement is entirely conditional upon the Purchaser in its sole discretion being satisfied that the property is suitable for the Purchaser’s intended uses following the Purchaser carrying out due diligence investigations on the overall viability of the property and including but not limited to searching any and all easements, and of any requirements of the local authority or financier, this clause is for the sole benefit of the Purchaser and the Purchaser shall have until 4pm on 10th working day from the date of this contract to give to the Vendor’s solicitor notice that this clause is satisfied failing which the contract shall be at an end. This clause may be waived by the purchaser prior to the prescribed time at the sole discretion of the purchaser.
read more

Reasons for Declined Mortgage Application


REASONS FOR APPLICATION BEING DECLINED

  • AGE FACTORS- UNDER AGED (BELOW 18) OR TOO OLD TO BE ABLE TO SERVICE A 25 YEAR TERM BASED ON CURRENT PROFESSION…LENDERS SHOULD NORMALLY NOT DISCRIMINATE AGAINST OLDER AGE
  • NON-RESIDENT OR OTHER VISA
  • DEPOSIT MAY NOT BE SAVED FOR REQUIRED PERIOD-LUMP SUM/ONLY GIFTED DEPOSIT & NO EVIDENCE OF ANY SAVINGS FROM APPLICANT
  • SOURCE OF DEPOSIT NOT EXPLAINED SATISFACTORILY-NO PAPER TRAIL
  • FREQUENT CHANGE OF EMPLOYMENT W/OUT VALID REASONS
  • FREQUENT CHANGE OF RESIDENTIAL ADDRESS
  • INCOME IS EXTREMELY IRREGULAR- IRREGULAR DEPOSITS TO A/C
  • SOURCE OF INCOME NOT CONFIRMED OR UNACCEPTABLE TO LENDER
  • IN CURRENT EMPLOYMENT ROLE FOR BRIEF PERIOD WITH NO PRIOR WORK HISTORY EITHER IN NZ OR OVERSEAS
  • INSUFFICIENT INCOME FOR AMOUNT REQUIRED AS ON APPLICATION
  • TOO MANY EXTERNAL BORROWINGS – HP’S, CREDIT CARDS/S, PERSONAL LOAN/S, DEFERRED INSTALMENT PLANS…
  • BANK ACCOUNT CONDUCT NOT ACCEPTABLE (REFER TIPS OF LAST WEEK)
  • A/P’S & D/D’S REVERSED WITHOUT STRONG REASONING
  • INFO DISCLOSED IS INCORRECT / INCOMPLETE – APPLICATION COULD EARLIER HAVE GONE TO SAME LENDER WITH DIFFERING INFORMATION.
  • NON-DISCLOSURE OF INFO IS QUITE SERIOUSLY VIEWED
  • BAYCORP HISTORY NOT GOOD ENOUGH
  • INSUFFICIENT TRADING PERIOD FOR SELF-EMPLOYED
  • WRONGLY ASSESSED BY LENDER
  • PROPERTY NOT ACCEPTABLE TO LENDER
  • IF REFINANCING – HAS MISSED REPAYMENTS ON HOME LOAN TO PREVIOUS LENDER IN THE LAST 6 – 12 MONTHS
read more

Costs Related With the Mortgages


SOME COSTS DIRECTLY RELATED WITH THE MORTGAGE – ESPECIALLY WHEN PURCHASING A PROPERTY

SOLICITOR - $750 TO $ 1,000 OR EVEN MORE

 ·       TITLE CHECK, LIM REPORT CHECK
 ·       MORTGAGE DOCUMENTATION, TITLE REGISTRATION,ETC
 ·       EXTRA COSTS DEPENDING ON OTHER WORK

LIM REPORT - $ 300 APPROXIMATELY-

·       DETAILS OF PLANS SANCTIONED
·       PROPERTY HISTORY, FLOODING RISKS, ILLEGALLY ERECTED STRUCTURES, SOIL CONTAMINATION, COVENANTS,ETC

RVR - $450 - $600- DEPENDING ON SIZE OF PROPERTY

·       RV REQUIREMENT DEPENDS ON LENDER.
·       REQUIRED WITH PRIVATE TREATY – ALSO DEPENDS ON LENDER, PP AND CV

BUILDING INSPECTION $ 350 TO $500-PEACE OF MIND

TRUST FORMATION - $ 1500 ONWARDS
-DISCUSS WITH YOUR SOLICITOR


LTC - $300 ONWARDS
·       THROUGH AN ACCOUNTANT OR SOLICITOR
·       YOU CAN FORM IT ONLINE YOURSELF-RENTAL PROPERTY BENEFITS

LOW EQUITY FEE/MARGIN

·       DEPENDENT ON LVR – NIL FOR LVR BELOW 80%
·       CAN BE NIL UP TO 85% LVER AT TIMES
·       IS EITHER A FEE OR A MARGIN ON THE INTEREST RATE

APPLICATION FEES_-CAN BE NEGOTIATED MOST OF THE TIME TO NIL

AFTER THE MORTGAGE
·       HOME INSURANCE - $40 ONWARDS
·       CONTENTS INSURANCE – YOUR CHOICE

WATER RATES – DEPENDING ON USAGE -$100 PER MONTH ON AVERAGE, CAN BE MORE DEPENDING ON FAMILY SIZE

·       COUNCIL RATES
·       ARC CHARGES (BETWEEN $200 - $300PER ANNUM FOR AUCKLANDERS)

LOAN REPAYMENTS

·       LIFE INSURANCE/TRAUMA/DISABILITY
·       MORTGAGE PROTECTION INSURANCE
·       HEALTH/MEDICAL INSURANCE
·       INCOME PROTECTION INSURANCE
·       REDUNDANCY INSURANCE

23.08.2010
30.08.2010

preparing for the unexpected

3 THINGS TO BE AWARE OF WHEN TAKING ON A MORTGAGE:

1)  LOAN IS APPROVED UNDER A SET OF CIRCUMSTANCES…INCLUDING INCOMES ( JOINT OR INDIVIDUAL INCOMES)…LOT OF APPLICATIONS RELY ON ONE OR MORE OF THE APPLICANT WORKING MORE THAN 1 JOB TO SERVICE THE LOAN…WHAT WILL HAPPEN TO LOAN REPAYMENTS IF 1 INCOME IS LOST OR JOBS ARE LOST IN AN UNEXPECTED SITUATION? PREPARE FOR THESE SITUATIONS BY NOT BORROWING TO THEMAXIMUM AND ALSOPROVIDING FOR A LITTLE BIT OF EXTRA REPAYMENTS WHEN THE LOAN REPAYMENTS START…THIS WAY YOU CAN REQUEST THE LENDER TO RESTRUCTURE THE LOAN AND SCALE BACK REPAYMENTS.

2)  PROPERTY PRICES WIL CHANGE WITH TIME…YOU WILL EXPERIENCE PRICE SWINGS IN BOTH DIRECTIONS….DO NOT BE DISTURBED BY DOWNWARD SWINGS IN PRICES….ENSURE YOU BUY AT THE APPROPRIATE PRICE…THERE IS NO FOOLPROOF METHOD TO ENSURE THIS…YOU HAVE TO DO YOUR HOMEWORK BEFORE BUYING AND MAKING YOUR OFFER.

3)  LOAN REPAYMENTS ARE BASED ON CURRENT INTEREST RATES AND WILL CHANGE WITH TIME. BE PREPARED FOR HIGHER REPAYMENTS WHEN INTEREST RATES INCREASE. ONE WAY OF PREPARING IS TO TRYAND START MAKING REPAYMENTS AT HIGHER INTEREST RATE LEVELS IF THE FAMILY BUDGET ALLOWS YOU TO. THIS WAY YOU ARE NOT TOO MUCH BOTHERED WHEN AN INTEREST RATE HIKE INCREASES YOUR REPAYMENT.
 
IF YOU ARE NOT PREPARED FOR EVEN ONE OF THE ABOVE THREE, TAKING A MORTGAGE IS NOT AN OPTION YOU SHOULD SERIOUSLY CONSIDER.
read more

Situation changed after taking mortgage


Have you insured your home, contents, car, life, incomes, and health?

IF YOU HAVE NOT DONE THIS- DO YOU HAVE A STRONG REASON? LET ME KNOW SO THAT I CAN SHARE IT WITH OTHER LISTENERS.
WHAT HAVE YOU LEARNED FROM THE RECENT CHRISTCHURCH EARTHQUAKE?

Situations can change overnight in life …especially in a mortgage situation. At least banks have now given borrowers a 3 month loan repayment holiday in South Island.

Incomes change – can be lost or reduced, separations & personal tragedies can happen

External borrowings go out of control – we do not realize we are borrowing and living beyond our means…the trap is especially with interest-free promotions &/or car hp’s

You have borrowed influenced by what you felt were very attractive offers.

You suddenly find you cannot make a loan installment payment on the due date – you did not budget and therefore borrowed more than you could service

To make payments work – u start delaying the hp repayments or missing them altogether

The HP Company sends you a notice… You then make up the payments on the HP

The home loan repayment is missed or delayed – the bank calls you or sends a letter

Other necessary expenses are delayed…insurances are stopped or delayed…this will affect you if the need to make a claim arises

In no time you have a small repayment crisis on your hands… STOP HERE

Talk to the concerned lenders – both the bank & the hire purchase provider…..put things in writing asking for some time to enable you think of a solution

Check if you have enough equity in your property to consolidate the borrowings…check if you also have sufficient income to service the consolidated loan

In many cases, you are able to consolidate the loans
CALL MORTGAGE MANTRA IF YOU ARE IN A SIMILAR SITUATION
OUT OF 100 PEOPLE WHO START WORK AT AGE 25 & REACH AGE 65:
1 IS WEALTHY, 4 HAVE ENOUGH SAVINGS TO TAKE CARE OF RETIREMENT
3 ARE STILL WORKING, 63 DEPEND ON SOCIAL SECURITY OR WELFARE OR FAMILY & FRIENDS…..29 ARE DEAD
read more

Buying a home isn't easy


Buying a home isn't easy. WHY?

There are expensive and overpricedhouses.

There are poorly maintained homes.

There are the 90s leaky buildings.

Many prospective buyers have been to upward of 15-20 open homes before they find something they like.

They're competing with others for that same property.

There are some bargains around but to secure one requires patience, detachment and clarity of purpose.

If you're buying in this market, it's important to do your homework more than ever.
Some tips for you:

1.   Go hard and fast. 
In your first few weeks get out and see as many properties as you can. The faster you get an understanding of the market, the faster you'll appreciate what a good property looks like and what you're prepared to pay for it. You need to move quickly if you find a great buy.

2.   Be realistic. A number of first -home buyers start their hunt looking at properties (and going to auctions) well above what they can afford. Eventually they are tired and start looking in the right price range.

3.   Be inquisitive. If a place is cheap (and looks good) it's usually because something is wrong with it. Do some basic checks yourself before paying to get a building inspection.


4.   Check that everything works. A building inspection will throw up structural issues with a house but could miss the small stuff such as heated towel rails, spa pool, dishwasher, dryer, drains, hot water, central heating, fans and oven.

5.   Consciously appoint your advisers. (Broker/banker, lawyer and building inspector).


6.   Make sure you can afford the mortgage. Banks will approve you for more than you can afford. It's important to have a realistic budget and to plan on higher interest rates.

7.   Plan your mortgage properly. If you're going to have kids, travel overseas, go back to study, work out what that means in advance for your budget.



     8. Pay more than the minimum. If you pay the minimum you will not get ahead and your     mortgage costs will increase when rates go up. Getting mortgage-free in 10 or 15 years is easy if you are disciplined about it.

9.Get independent advice. There are a large number of packages out in the market, low equity fees to watch out for and different lending criteria across banks. A good mortgage adviser can look at all of the options to make sure you get the best possible outcome. That may end up being your own bank, but at least they could present you with different options.


10.Avoid consumer finance. Although a hire purchase may be interest-free, at some point it needs to be repaid and will then impact on how easy it is to live with your mortgage.


    11. Tip: A home and income property can be a good way of leveraging yourself into a better suburb. It can lift your borrowing power by $150,000-$200,000. It feels great to earn income off your house.It can also be a risk if your mortgage repayment ability is dependent on the rental income.


BEFORE YOU GO HOUSE-HUNTING, GET YOUR LOAN PRE-APPROVED.
read more

Is Real Estate Market slowing down?


From news reports in the local print media:

Over the next 20 years Auckland will grow by the entire population of Wellington, but to accommodate everyone Auckland will need more than 200,000 households - 30,000 more than its current capacity.


Auckland is facing a major housing crisis if current development trends continue.At the current rate of development, there will be a shortage of 50,000 homes in 30 yearsor 30,000 more homes in 20 years- equivalent to all the homes in Hamilton.

Auckland will face a large scale housing crisis within the next 15 -20 years(by 2026).Some areas will be full in 7 years.

The ability to create new stand-alone houses on more than 400 square metres of land will become virtually impossible by as early as 2023. Locals will be forced to live in terraced houses and apartments with shared common outdoor spaces.

The ¼ acre dream is all but over.
Subdividing smaller properties and expanding into semi-rural areas is a must to avoid a major housing crisis.
"The  ???ishow do we accommodate those 50,000 dwellings?"
Council would focus on more intensive development within the city limits; there were plans to expand development west of Massey, west of Manukau, and south of Papakura and Karaka. More development is likely to include rezoning existing land and changing regulations to allow subdivision of smaller sections.
According to the report,in the past three years Auckland had "already fallen short by approximately 10,000 new homes - equivalentof Blenheim".

? IS WHY DID THE PROPERTY MARKET SLOW DOWN?

What could happen? “Prices will surge”
Renters would leap to 40 per cent of households - either by choice or because they could not afford to get on the property ladder as prices will increaseas more and more people compete for an ever dwindling supply of dwellings

A bird’s-eye view of Auckland will tell you that there’s plenty of room to grow, the fact is that red tape and restrictive rules on land use means that growing in as-yet developed areas isn’t as simple as it sounds.“There is a ring fence around Auckland called the Metropolitan Urban Limit that separates the urban from the rural”
"Prices will surge as more and more people compete for an ever-dwindling supply of dwellings," said Phillips.

High-density housing would certainly become a more prominent feature of the urban landscape in the future.
There would not be enough builders in the coming years to build all the necessary houses, because of the demands posed by the Christchurch rebuild and leaky building repairs in Auckland.

"The industry is continuing to shrink but we can see the looming shortfall will hit us sometime next year. We may have to look at bringing tradesmen over from China, Philippines or Malaysia - but it's likely Japan and Australia will be trying to attract them as well."
read more

Action in the Auction Room


REPORT IN NZ HERALD ON 05.09.2011 – ACTION IN THE AUCTION ROOM
As the world was on the brink of caving in just over a month ago, a bunch of people in Barfoot& Thompson's Auckland auction rooms had more important things on their mind: how much to bid for a small lump of land on the city fringe a 10-minute drive to Queen St?

On a day in which the overall bidding action was fairly subdued and at times non-existent, the competition for 1A Fowler Ave, Mt Albert, was dynamic.

What we had here was a 610sq m section containing a derelict home in a pleasant inner-suburb street in good school zones, just 300m from the Mt Albert village shops ... and 100m from the railway line.

So when did land within the hiss and roar of trains become so much in demand? No finite answer to that but after a couple of decades of in-fill housing, finding a section close to the city center is gettingtough. Huge demand and tiny supply can mean only one thing, even with the backdrop of potential economic mayhem in the United States and clickety-clack at home.

A quick look at 2008 rating values shows a $380,000 land valuation for 1A Fowler, and an average of about $370,000 in the street. Mt Albert has done better than many areas over the past three years, and the 2011 valuations - due in letterboxes at the end of October - may see a rise of around 10 per cent or so.

 On that basis, you'd think a starting point for 1A Fowler Ave might have been a little over $400,000, with a "competition premium" of perhaps 15-20 per cent pushing the price to around $480,000. So much for theory.

The bidding opened at $300,000, the "now selling" sign went up at $480,000 and - 30 bids later, after a total of 55 bids - the hammer fell at $541,000.

With the subsequent demolition likely to give no change from $20,000, that puts the "clean section" at a touch over $560,000 - a lot of money to pay for land close to a railway line. Perhaps the buyers got confidence from the sale six weeks earlier in Baldwin Ave - three streets down and just as close to the tracks - where a renovated three-bedroom bungalow on 697sq m sold for $900,000 (against a 2008 rating capital value of $660,000).

Those sorts of figures may suggest Auckland real estate is firing. In some areas, especially those close to the city centre, it is, fed by a lack of listings as cautious property owners wait to see continued improvement in the economy.

But buyers are fussy, going for homes which are wellpresented and demanding value for properties which fall short of that mark. Leaky homes needing remedial work - and even sound properties built in the style that has caused problems - are being shunned.

Barfoot& Thompson sells more homes in Auckland than any other agency and their auction this day was a strange mix of furious action and disdain.

Of the 28 residential properties on offer - covering west, central and east Auckland, but none on the North Shore or in South Auckland - just 11 sold under the hammer. Eight of the lots passed in drew no bids. An earlier mortgagee auction was similarly restrained, with three sales from the eight properties on offer.

Reports suggest many first-home buyers are staying clear of auctions because they don't want to pay hundreds of dollars for specialist reports and then find the "investment" is wasted as the price on the day moves above their budget. Signing a standard agreement on an agreed price, conditional on the reports, gives them more certainty.

But that concern doesn't hold everyone back for lower-priced properties, and competitive bidding can bring some great results.

Take 8 Ambler Ave, Glen Eden, for example. Bidding for the renovated two-bedroom home on a sub-dividable 1065sq m section opened at $250,000 and quickly hit the $345,000 reserve. Two parties tossed around $1000 and $500 bids from there to push the final price to $370,000 - a $25,000 advance on what the owner would have been prepared to accept.

But the closer to Queen St, the higher value the prize, and 40 Warwick Ave, Westmere, shows the value of location. The three-bedroom bungalow with all the extras (but just one bathroom) on 434sq m went for $1.08 million. It last sold in May 2008 (seven or eight months after the market began its decline) for $780,000.

If anyone needed further evidence on the power of auction to squeeze the best price, it came with unit 1, 2 Carlton St, Hillsborough. A pre-auction agreement for $533,000 which the owners were happy to accept was pushed to $573,000 under competitive bidding to provide a cool $40,000 premium.
read more

Ring us today for the best advice on mortgages!

0800 728 474