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I was recently featured in the NZ Adviser guest article where I answered questions that can often challenge second home buyers.

From the article

“The key steps for second-home buyers are finding the right kind of lender for their scenario, working out whether I can get it across the line and thinking ahead to see what the biggest challenges are going to be,” she concluded. “All of that will depend on which bank they end up going to.”

To read the rest of the article follow this link to visit NZ Adviser website.

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I was recently featured in the NZ Adviser guest article where I answered the question on being prepared for change of interest rates.

I always recommend clients plan ahead for interest rates to rise even if they never to. This is important to ensure they have enough wiggle room and can continue to meet payments in the event of rates increasing.

From the article

“The environment also makes some people feel that they can do something now where they haven’t been able to in the past,” she added. “But I always talk about what would happen if rates did go up by 0.5%, or by 1%, and being able to plan for that. I have experienced that scenario, and it can be quite painful if you’re not prepared.”

To read the rest of the article follow this link to visit NZ Adviser website.

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I was recently featured in the NZ Adviser guest article where I answered many of the questions first home buyers have, and the challenges they face when looking to get their first home in the NZ home owners market.

From the article

“A lot of the challenges that first-home buyers face are around short-term debt.”

One of the things I discussed is around needing the right percentage of deposit.

“They’re dealing with things like student loans and vehicle finance, and they’re often using their KiwiSaver as a deposit. So they need advice around what a 10% deposit will look like for their savings, and the costs that they’re in for around having a 90% loan.”

To read the rest of the article follow this link to visit NZ Adviser website.

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Something I get asked a lot by existing home owners is: ‘my house is worth $1Million and my mortgage is approximately $500,000, can I use it to buy another property?’

The short answer is – it depends on a few things.

Do you have the necessary income to be able to service the use of that equity?

What is your current financial statement of position?

What do you own and what do you owe?

A number of homeowners feel that their equity is wasted and is sitting there doing nothing…….. but they don’t realise what they need, to be able to use it and make it work for them.

If you have a property and you’re wondering about your unused equity and what it actually is, equity is the difference between your property value and your liabilities secured against it, such as your mortgage. The percentage of this equity potentially available to you depends on the purpose of what you intend to do.

If you are considering the purchase of an Investment / Rental property you may be able to use some of the equity in your existing property as the deposit or as a cross security for the purchase.

If that piques your interest, we need to talk! I can do the numbers for you on whether you can use that equity or not and work with you to create a plan to make it happen.

And it all starts with a chat and a cup of coffee. Ready to do the numbers? Email me now: rachael@ilg.co.nz

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A number of first home buyers are currently in the position of trying to find out if they can buy a home and are considering whether they can use, or will use their Kiwisaver.

Kiwisaver is intended for retirement, not for use right now, however I am working with a number of people who are buying their first home and are most definitely using their Kiwsaver as a deposit.

If you think you might want to use your Kiwisaver then your Kiwisaver provider is the first port of call. They will advise you

• whether you should use it for this purpose
• if you meet the withdrawal criteria, such as, have you been a member and contributing for 3 years and
• how much you might be able to use: as an example – all yours and your employers contribution. FYI: you will be expected to leave $1,000 in the fund.

There is a second part to Kiwisaver called the Homestart Grant which is administrated by the IRD. This gives you the opportunity to increase your deposit funds by up to $5,000 for an existing property and $10,000 for a new property. There is criteria that you will need to meet:

1. You have been a member and contributing to Kiwisaver for 3 years

2. You current income meets income caps: individual $85k, couple $130k, and regional house price caps

If you don’t have any other savings or help from a family member then Kiwisaver might be your only option for a deposit on a home. You are only a first home buyer once, so if you buy a house then decide you want to buy another one and didn’t use your Kiwisaver then it wont be an option. There are of course exceptions to this rule, such as, if the property hasn’t been owned in your own name or you qualify for a second chance option. As an example, the people who have left earthquake damaged properties in areas like Christchurch fall into that category.

Note: Kiwisaver and Homestart Grant qualifying criteria is subject to changes so do your homework with your Kiwisaver provider and check out the following link for details about the Homestart Grant:

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I often get asked: ‘If I buy car, a couch using finance, or max out my credit cards on a holiday can I still get a mortgage?’

Short term debt comes in different forms:

• credit cards
• personal loans
• vehicle finance
• store cards
• short term loan terms
• or finance with high interest rates

The amount of short term debt you have can most definitely challenge your ability to get a mortgage as it can affect the servicing of that mortgage, something which banks take seriously into account. The good news is, there are also other factors involved. As an example, a lender will also take into account:

• how much income you have
• how much deposit you have
• how much the debt is
• and how it was accumulated

because there is more to doing the numbers than just one part of the equation.

A number of people trying to get a house and a mortgage don’t realise that the servicing of short term debt such as that mentioned above, can affect your ability to service a mortgage as most lenders have a different affordability calculator and servicing rate and therefore your maximum mortgage number is calculated differently.

Sound overwhelming? Don’t fret! That’s where I can help.

In my capacity as ‘The Smarter Mortgage Lady, I have helped a number of people with short term debt, buy a home. Consolidating short term debt might mean that you can afford the house you want and can get the maximum mortgage you need to do it, but it can mean you pay more for the short term debt in the long run.

Using savings to pay off short term debt may mean you don’t pay more for the debt when you get a mortgage, but may affect your ability to buy a house as it will reduce your deposit.

To help you out, here’s some tips and tricks from me!

Tips and Tricks

• Try to avoid the build up of short term debt
• If you have short term debt, work on paying it off as fast as possible
• Put a plan in place to prevent any new debt and increase savings
• Set goals around your spending such as less nights out or reduce the number of takeaway coffees you buy

So just remember, just because you have short term debt it doesn’t mean you cant buy a house or get a mortgage. Just talk to me – the Smarter Mortgage Lady – let’s run the numbers to see if we can make it work for you.

e: rachael@ilg.co.nz

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Why would you consider a review of your existing mortgage structure or change lenders? Doesn’t it sound like a lot of hassle?

The answer is simple: because it can potentially save you thousands of dollars over the course of your mortgage term, and don’t we all want that?

Have you had a review of your existing mortgage structure and done the numbers on the ‘costs vs benefit’ to break any fixed term loans or restructure some to a floating facility? If you haven’t you won’t be aware of the answer to this or the potential savings available to you. For some people moving banks may not be an option as

• they’re recently self employed
• still in their 90 day probation period
• about to have or just had a child
• had some larger expenses recently
• or have too much short term debt (personal loans, vehicle finance).

When is a good time to review your mortgage?

NOW! Now is actually the perfect time to check and see if you can still save some money by reviewing the rates you have, vs what might now be available to you and the structure of your mortgage. As a specialist in ‘Smarter Mortgages’ I run the numbers on the cost vs benefits of moving from a higher interest rate to a lower interest rate. If there are any potential savings available to you, you have a couple of ways of being able to utilise them, such as putting them in your pocket by reducing the repayments to the minimum and paying less for your loan, or keep your repayments the same and using the savings to pay off the loan faster.

Why refinance?

This usually means moving lenders by the way…….If you can’t do what you want to do with your existing mortgage and lender, then moving to another one might be a better option. Some people also choose to move if they are unhappy with the services they have been receiving.

So: how can Rachael Thompson – the Smarter Mortgage Lady – save you money on your mortgage?

I use a unique process to structure your finances, creating flexibility and certainty and giving you the ability to pay off your mortgage faster – if you choose to do that – or certainty of cost and repayments to enable you to manage your budget. I believe everyone deserves to pay off their mortgage as fast as possible, while still maintaining a comfortable lifestyle.

If you approach your mortgage like a business, then you should be looking to keep your costs to a minimum and maximise any savings. It’s that simple! And it all starts by me running the numbers.

Ready to talk? Contact me today and let’s take a look at how I can save you time and money.

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