Do you plan to buy your first home in 2018?

Getting On The Property Ladder

We hear all the time how hard it is to buy your first home and of course it is not easy.

Buying a home is a big decision and commitment.

In many cases this will be the biggest purchase that you have ever made, and with that comes the biggest debt that you’ve ever had too.

Buy it’s the Kiwi dream to own your own home and something that many of us strive to do.

So how do you get started?

Big Decisions… Getting Started

The first of the big decisions is to make sure that you are ready for the commitment – both buying a long-term asset and the commitment of the dreaded mortgage.

But there are a lot of things to consider and everyone is different, so will have different thoughts.

Where to buy – of course a first home is normally purchased within a budget and that means buying a house that you can afford rather than your dream home. Your budget will often dictate the type of house but also the suburb.

How much to pay – this may also be dictated by what you can afford. The key here is to work out what you feel comfortable paying, not just relying on what the bank say you can afford. Sometimes the banks will lend you a lot more than you are comfortable with paying, and other times it’s the opposite – the banks say you can only borrow a certain level yet you know you can afford a lot more. Remember that banks criteria is all different so what one bank says you can borrow might be quite different to another bank. A mortgage broker can help you with this.

Which bank? – most people by default go to their own bank first; however this is not always a good decision. As mentioned above the banks are all different and while the money is the same, the cost of the money and ability to borrow can be different.

Buying an existing home or new – in most cases buying an existing home is more affordable as the house already has everything established; however buying new is worth considering. When you buy a house and land package or a recently finished new home there are a few advantages. For starters the finance criteria is different and that means you can buy with a lower deposit. Other advantages in buying new is that they are more efficient (less heating costs etc) and you should have a number of years before you have any significant maintenance bills. New homes are also quite nice to live in.

There are a lot more decisions to make when you are buying your first home, but this should get you thinking.

Take Time Getting The Right Loan

Buying your first home and getting the finance may seem the hard part, but what many people seem to overlook is the years ahead of paying the mortgage.

A mortgage is a large financial commitment and therefore you should spend some time to make sure that you get it right.

Unfortunately many people just take what they are offered by their banks, and it’s not until they have wasted a few years that they decide to seek advice on how to best structure things.

The loan structure is the most important thing as a good structured home loan will allow you to pay it off faster which can save you huge amounts. You also want to ensure that it’s you, not the bank that ultimately have control over the loans.

Remember that banks are there to make money for their shareholders, and that does not always mean they will be encouraging you to pay of your home loan faster and doing the bank out of those profits – it almost certainly will not be about lower bank profits!

The post Do You Plan To Buy Your First Home In 2018? appeared first on The Mortgage Supply Company.

Of course the real question is not who knows how to value a house, but how do they place a value on a house.

The reality is that the value of a house is what a willing buyer is prepared to pay for the house at any point in time and that can depend on a number of factors which might include the local economy, confidence in the market and number of properties on the market at that particular point in time.

Sometimes it is a sellers market – it is easy to sell houses as there is a high demand from buyers.

Other times it is a buyers market – lots of houses for sale and not too many buyers.

Rates or Council Valuations

These valuations are done for the Council’s so they can levy property owners for rates, which effectively is the Council’s main income used to fund the services they provide for the towns and cities of New Zealand.

The Auckland Council has just released the new 2017 valuations and as a mortgage broker we are already seeing that they are quite different to the market values in many instances, but they can also be used to establish the value of a security for the banks; hence have been useful.

There are lots of people that are not happy with their council valuations, but as always we expect very few will actually do anything about this.

Online Tools

We live in a World where there are online tools and Apps for almost everything, and property valuations are no exception.

As mortgage brokers we have access to online valuations and at times the banks will be happy to use them too; however they are not always accurate so they need to be used with care.

The online valuations are purely statistically based using past sales data to determine the values of similar sized houses and sections within the same local area. Issues arise for a number of reasons including the various outlooks (inner versus coastal), the contours, conditions of the houses etc…

To get a more formal online valuation we can access e-values which cost $49.95 and some banks will be happy to use.

Using Property Valuers

There are a lot of “professionals” who are qualified to value a house, but in property markets like we have in Auckland at present even they are finding it difficult. Property valuers will claim their teams of qualified and experienced registered valuers around the country will help you establish the market value of a property and to complete due diligence, providing your financiers with the right numbers and you with piece of mind.

The advantage of having a registered valuation completed is the accuracy and the fact that the valuers are insured. Being insured in itself does not guarantee the quality of the valuers reports, but it does mean the banks and other lenders have some recourse if the valuer makes a mistake or is fraudulent.

Real Estate Agents Value A House For The Market

Most real estate agents presume they know what a house will sell for and can even product  data to back up what they deem to be the value.

The issue with some real estate agents is they will say what you want to hear so they get to list your property for sale and therefore you end up hearing the wrong information. I guess in their defense they are trying to make a sale and it is easier to keep it friendly and agree than enter into a debate over the value of your property.

When serious about selling your house, real estate agents may promote different methods like auctions, by negotiation, tenders, set date of sale and others rather than putting a price or perceived value on your house. This works in a bullish  market and this way they hope to find buyers willing to pay the most for your property.

Your Own Research & Gut Feel

Sometimes your opinion will be better than anything else – especially if you are buying a house as a home.

If you are prepared to research and go to view the houses for sale in your area you will quite quickly get a concept of the property values. Be careful not to focus too much on the asking prices as it is the actual sale prices that really matter.

With Auckland property you may find that the prices are harder to establish as good properties are being snapped up fast, but in other parts of the country you want to try to also gauge how long a property has been on the market and the reason for the sale – if possible. Someone who is buying and selling on the same market is not too concerned about the values as long as it is the difference in values between the property they are selling and property they are buying that really matters most.

The post How To Value A House In Auckland appeared first on The Mortgage Supply Company.

It is so easy to get into debt for small purchases and before you know it you have a number of these debts which are often expensive.

Consider some of these debts;

Credit Cards – ANZ have a low rate Visa which has an interest rate of 13.90% but the other cards will charge you 20.95%.  Most banks are similar and then cards like the GEM Visa charge a higher interest rate of 24.95% unless there is some interest free deal being promoted by a retailer.

Store Cards – a lot of retailers use the GEM Visa but a lot of people have a Farmers Card which charges 25.50%

Personal Loans – banks love to provide personal loans but they are not the cheapest way of obtaining finance. ASB Bank advertise unsecured personal loans from 13.95% to 19.95% and even the secured personal loans are 12.95%. You can often get personal loans from non-bank lenders and peer to peer lenders at more favorable interest rates.

Vehicle Finance – interest rates for vehicle loans vary a lot with the major companies like MARAC offering rates from 9.75% to 19.95%, MTF Finance from 9.75% – 21.75% and UDC from 9.35% to 14.55%. Other companies might do some of the harder to approve deals and bad credit loans but the interest rates reflect the higher risk with Finance Direct charging up to 24.95% and Finance Now up to 27.95%.

Source: https://www.interest.co.nz/

Getting into debt in New Zealand is often too easy.

Many retailers have arrangements with lenders to fund purchases and these loans can be approved online or in minutes rather than hours or days. Of course the lenders may take short cuts and accept more risk, but with the higher interest rates they are making enough to cover a few losses along the way.

But why would you pay more that you should when there may be better options available?

About Debt Consolidation

A lot of people think of debt consolidation loans when their debts start to become a problem for them, but really people should make a conscious effort to review their debts and think about debt consolidation either as a specialist loan or by incorporating the expensive debts into their mortgage at the lower interest rates.

Specialist Debt Consolidation Loans – if you do not have a property or have a large mortgage which means you cannot do a top-up then a specialist debt consolidation loan might be the best option. The key thing to consider is the overall cost as sometimes the loans promoted as the ‘so called’ best option can end up more expensive and only spread the repayments out over a longer timeframe.

Using Your Mortgage For Debt Consolidation – mortgage finance is some of the cheapest money that you can get and therefore you should think about debt consolidation using your mortgage; however it is generally recommended that you make sure that the loan is not spread out over 30-years like many mortgages are – you car or computer will need replacing a lot sooner than that! 

Contact a mortgage broker and they can discuss the options with you.

The post Why Pay More Than You Should? | Think About Debt Consolidation appeared first on The Mortgage Supply Company.

Getting A Home Loan Approved

Yes, if you have fallen in love with a new home then you might think that getting a home loan approved is the most important thing.

Too often we see people in a rush to get an approval and then take the first loan offered by the bank, thinking that a loan approval is a success. After all, they get the loan which allows them to purchase the new home.

Then the real hard part starts – paying off your home loan.

Pay Off Your Home Loan Faster

This is where you should concentrate your efforts, and here are a few tips to help;

Structure your mortgage properly – we typically suggest that you split your mortgage into at least three loans;

1.    A small revolving credit loan which allows you to pay extra so that your mortgage is paid off faster, while also allowing you to control your loan rather than letting the bank have all the control.

2.    Fix the majority of your mortgage to get the lower interest rates and more certainty.

3.    Split the fixed portion into two loans and stagger the fixed terms so they do not come off the fixed rates at the same time.

Pay more than the minimum – if you have a revolving credit loan (as per suggested structure) then you can pay extra into that loan, and then make lump-sum payments off the fixed loans when they are refixed. Also at this time you can adjust the repayments so you are paying more than the minimum.

Small increases to the repayments can make huge differences over time.

An extra $50 per week on a standard $300,000 mortgage (at 4.50%) will see you pay your mortgage off almost 7-years faster and you will save over $60,000!

Make sure you continue to get competitive interest rates – too often banks will give you a good interest rate or other enticement to get you to sign up with them, but they then forget that you are a good customer and don’t really look after you as well as they should.

If you have a mortgage broker then ask them to negotiate interest rates on your behalf, and if you don’t yet have a broker then you should consider speaking to one. Good mortgage brokers will ensure you get the best interest rates every time and this is a service that costs you nothing as the banks pay the broker.

Don’t pay any loans where the interest rates are higher than your home loan rates. Often people are paying off credit cards where the interest is almost 20% or store cards which can be closer to 30%, yet they could be paying under 5%.

This is throwing your money away and the only winners are those banks and finance companies – not you.

Plan To Review Your Home Loan

To review and manage your home loan takes about 30-minutes a year and could save you thousands of dollars. As local Hobsonville mortgage brokers we offer to review your home loan for free so there is really no risk in getting some advice which may help, and it doesn’t matter if you have never spoken to a mortgage broker before or which bank you are with.

Contact us to schedule a time to review your home loan.

Managing your home loan better can save you a lot of stress and money too.

The post Some Tips For Managing Your Home Loan appeared first on The Mortgage Supply Company.

You will also find that The Mortgage Supply office in Hobsonville will be closed over this period; however Stuart Wills will remain on call should you need to find a mortgage broker to speak with.

The Office Hours

The Mortgage Supply office in Hobsonville will be closing at midday on Wednesday 20th December and then reopens on Monday 15th January.

During the time that the office is closed you can always get hold of Stuart Wills;

Stuart Wills -Mortgage Broker

Email: stuart.wills@mortgagesupply.co.nz

Mobile: 021 984340 (phone or text)

Please leave a message in the case the phone is not answered as Stuart maybe on another line (fishing line) or away on a course (golf course) or busy at the time that you call.

A text or email will always get a response.

The Banks Hours Of Business

The banks are generally open for business on all but the statutory holidays; however you will often find that they are working with a small team and maybe unable to provide answers to those more complex questions, or to discuss a scenario.

This is where an experienced mortgage broker can help.

Most Solicitors Take A Break Too

If you have property transactions over the Christmas and New Year period you will need to check that your solicitor is available as many are closed for the same period that we are closing the office.

For this reason we see most property transactions get delayed until after the 15th and we already have a number of settlements lined up for Friday 15th January.

Have A Great Christmas!

From the Mortgage Supply team we do wish that you have a great a Christmas and New Year.

This is a time of the year that most Kiwi’s really enjoy, and some a little too much.

Please stay safe and we look forward to catching up and helping in 2018.

The post Mortgage Broker Working Over Christmas & New Year appeared first on The Mortgage Supply Company.

The general rule was banks were looking for people with a deposit of 20% or more.

In Auckland with the increasing house prices that has made in extremely hard for many first home buyers who have been trying to get onto the property ladder.

Read the announcement here: CLICK HERE

Why Were LVR Restrictions Introduced?

The LVR policies were introduced in 2013 as a temporary measure to address financial stability risks arising from rapid house price inflation and increasing household debt.

At the time they were originally introduced the share of banks’ mortgage portfolios where the lending was above 80% of the value had steadily increased to 21%, “posing a risk” to financial stability. Consider this another way, around a third of new loans being originated had borrowing at levels above 80%.

Before introducing the LVR policies, The Reserve Bank asked the major banks to curb the low deposit lending that they were doing and warned that they could impose some restrictions if things did not change. At the time in early 2013 the aim was to limit the banks ability to provide low deposit (under 20% deposit) mortgages to 15% of the banks new lending, but as the banks appeared to make no effort to control their lending, The Reserve Bank stepped in and placed a harder restriction only allowing the banks to lend out 10% of the banks new lending to those people with less than a 20% deposit.

There were a few exceptions, including the Government backed Welcome Home Loans and finance for new homes.

What Does This Mean To First Home Buyers?

The changes to the LVR rules mean that the banks can now provide more lending to those buyers with less than 20% deposit.

Currently and until January 2018 the banks are restricted to 10% of the banks new lending being done where there is less than 20% deposit, but for January 2018 this increases to allow the banks to provide 15% of the new lending to those people with low deposits.

Some people are saying that this is only providing a small increase of 5% but an increase from 10% to 15% actually allows for 50% more first home buyers to qualify.

50% is a huge increase!

You can read more and keep up to date on the Kiwi First Home Buyers Facebook Group.

Expect House Prices To Increase

Of course, by providing first home loans to more buyers there will be more pressure on those houses priced for first home buyers.

We are talking about a lot more people being in a position to buy a first home due to the banks being able to offer lower deposits and that extra demand will see pressure on prices to increase.

This does not come into being until January, so we expect there will be a little rush of people trying to buy homes before Christmas – before people realise that they will now qualify for a home loan. This is of course assuming that the banks decide to relax their own rules and lend more to first home buyers again.

So while this is good news for first home buyers, it is also probable going to mean we will inevitability see house prices increasing again.

The post Some Good News For Auckland First Home Buyers appeared first on The Mortgage Supply Company.

Let me explain…

Definition: “live off the land”

Source: https://idioms.thefreedictionary.com/

To live by eating only the food that one produces from the land; to survive by gathering or stealing food, fruits, berries, eggs, etc., while traveling through the countryside.
We lived off the land for a few years when we first started out farming.
The homeless man wandered about, living off the land.

Many people may choose this lifestyle and many people may remember watching Tom and Barbara Good in the television series The Good Life where they adopt a sustainable, simple and self-sufficient lifestyle while staying in their home in The Avenue, Surbiton. They turn their front and back gardens into allotments, growing soft fruit and vegetables. They introduce chickens, pigs (Pinky and Perky), a goat (Geraldine) and a cockerel (Lenin). They generate their own electricity, using methane from animal waste, and attempt to make their own clothes. They sell or barter surplus crops for essentials they cannot make themselves. They cut their monetary requirements to the minimum with varying success.

Aucklander’s Are Not Farmers

Of course very few Auckland people are commercial farmers, even if there has been a trend to have a vege patch.

In small town New Zealand it is possible to live off the land and from the sea; however in Auckland most sections are too small to produce much in the way of produce, and almost certainly not enough to provide enough to live on.

Of course, anything that you can produce will help save money and that’s a good thing.

Living Off The Land Auckland Style

When it comes to talking about Aucklander’s living off the land, they are in fact living off the increasing value of the land.

As Auckland mortgage brokers we speak with a huge number of people who have mortgages that are larger than the what they paid for the house – so rather than pay off the mortgage they have obviously borrowed more since the initial purchase.

A real life example;

Today I met a lady with a home in Massey which she purchased in 1994 (23-years ago) for $147,000 and while she probably would have had a 25-year mortgage and therefore should have the loan almost paid off, she is asking to refinance the mortgage and borrow some extra money so she will end up with a mortgage of close to $185,000.
That is an increase in the mortgage of $38,000 or about $1,650 per year.

Over the same period of time the property has increased in value and now has a new CV of $920,000.
That is an increase of $773,000 over 23-years or just over $33,600 per year.
While this all sounds good, it only really helps if she downsizes or shifts out of Auckland to somewhere with cheaper houses.

This is just one example that I’ve seen this week, but it is a common occurrence to see people that are living off the land in a similar manner.

What Do People Spend The Money On?

Some of these people have borrowed for good reasons, while others (and maybe most) have financed their over-spending.

A good reason to borrow money against the family home might be to invest in income generating assets or business. This way you are able to obtain cheap mortgage finance and are generating extra income and while it is preferable not to borrow against the family home, many people will as it is easier and cheaper. The key is to ensure that there is a plan to pay back the money that has been borrowed.

A bad reason to borrow money is to fund over-spending or otherwise known as your lifestyle. It is very common for people to borrow money on their mortgage to pay for a new vehicle, and boat or holiday. While we can argue that this is the cheapest way to fund these purchases any borrowing needs to be paid off within a term suitable for the item purchased. A lot of people also do debt consolidation within their mortgage and again while this seems the logical way to reduce the cost of debt, any debt consolidated into a mortgage needs to have a sensible repayment plan and be combined with a change in spending habits so you do not continue to to rack up more debts.

When The Money Tree Dies

While for years Aucklander’s have been able to live off the land, the ability to continue this is coming to an end … the money tree is dying!

There are two fundamental reasons for this;

1. Property values do not always increase – there has been a lot of efforts to slow the price increases we have seen over recent years and some indications are suggesting that prices have leveled off, although most economists still expect to see continuing increases but at a slower rate.
2. People can only afford so much – the size of the loans people have is limited to their incomes and therefore how much they can afford to repay. Over the years people have increased their borrowing to the point where The Reserve Bank has suggested that they may introduce new rules to link the maximum borrowing to a persons income – debt to income ratios. This has caused the banks to get stricter on how they calculate what people can afford and combined with the larger mortgages we are now seeing a significant number of mortgage applications being declined based on the lack of affordability.

In the future we would expect that people will no longer be able to keep increasing their mortgages and instead will have to live within their means.

The ability for Aucklander’s to live off the land is coming to an end, but that may be a good thing.

The post Aucklander’s Have Been Living Off The Land For Years appeared first on The Mortgage Supply Company.

As established Auckland mortgage brokers we will often negotiate interest rate deals with the banks and now as part of this process with banks some are asking the use of the property – is it an owner occupied property or an investment property?

Why Should It Matter Who Occupies A House?

The actual properties (houses, townhouses and apartments) are all the same regardless if they are occupied by an owner or a tenant, but the banks tell us that the risk of mortgage defaults is higher on those properties used as rentals.

If there is another Global Financial Crisis or even a depressed local economy then the banks fear that there will be more mortgage defaults.

Human nature dictates that people will let a rental property or a holiday house be sold before they would let their home be sold.

If the banks were solely looking to minimise risk then you would expect that they would also factor in the equity within the property too as the higher the equity, the less the risk. Most property investors will have at least 20% equity in a property based on the old rules, and for properties purchased more recently most investors are having to put in a 40% deposit. With these large amounts of equity the banks risk reduces significantly and therefore we would argue the reason for having a higher interest rate no longer exists.

So It Happens In Australia…

The banks that are charging property investors higher interest rates are the Australian owned banks, so that is most of them.

In New Zealand we have ANZ Bank, ASB Bank, BNZ and Westpac that are all owned by parent banks in Australia. They have taken the stance that because in Australia they charge higher interest rates like the ANZ 2-year fixed rate shown (as at 22/11/2017) which they charge 4.19% as a property investment loan whereas as a home loan they charge the lower interest rate of 3.88% which means property investors are paying almost 8% more than home owners.

We’ve seen it reported in Australian media that it “makes sense” for banks to charge property investors higher interest rates because their loans have a different risk profile to those being paid off by people living in their home. What banks might say if they were being entirely truthful is that it “makes sense” to charge more where we can as this is an easy way to increase our profits. Now I’m sure they would argue this point, but the banks cost of funds is the same regardless if the money is then loaned out to borrowers for home loans, property investment loans or for that matter personal loans.

Ask Your Mortgage Broker To Negotiate Interest Rates For You

You can jump up and down and insist that your bank provide you lower mortgage interest rates, and sometimes the banks might move a little.

Another way, and an easier way is to have a mortgage broker do the negotiations for you.

The advantage that a mortgage broker has is he/she is dealing with a range of banks all of the time and therefore has a pretty good idea of what interest rates to expect and therefore how hard to push-back with the various banks. Also when a bank gets contacted by a mortgage broker they know that the mortgage broker knows what the other banks are offering and suspects that the mortgage broker will advice you to shift to another bank if the rate offered is not competitive.

While there is no guarantee that a broker will get a better interest rate than the bank might offer if you went direct, they will ensure that you are getting a competitive interest rate which should never be any worse than what the banks would offer directly.

Plus, most New Zealand mortgage brokers will not charge you to negotiate interest rates as they generally get paid by the banks for this.

Be Prepared To Refinance Your Loans

If you want to “threaten to refinance” to another bank you want to be prepared and know that you have that option.

As customers you go to a bank to get money, and the money is the same no matter which bank provides it. For this reason people do shop around and mortgage brokers by nature shop around for their clients too. It is important to ensure that the banks are treating you well and providing you with competitive interest rates.

As property investors the interest rate that you get charged is very important as this directly impacts the profit that you make on your investment. The interest that you pay is typically the largest expense that you have for a property so it can mean the difference between a loss versus the same property having a break-even or even a profit.

While some banks have started to charge property investors more, other banks do not.

It makes a lot of sense to support those banks that support property investors, so if you are being charged higher interest rates by your bank then maybe it’s time to look at making a change and refinancing your mortgage to an investor friendly bank.

The post Why Should Property Investors Be Charged Higher Interest Rates? appeared first on The Mortgage Supply Company.

If we want to use a Welcome Home Loan with just a 10% deposit then we are limited to the price caps;

In Auckland the price cap is $600,000 or up to $650,000 for a new build

In Hamilton City, Tauranga City, Western Bay of Plenty District, Kapiti Coast District, Porirua City, Upper Hutt City, Hutt City, Wellington City, Tasman District, Nelson City, Waimakariri District, Christchurch City, Selwyn District, Queenstown Lakes District the price cap is $500,000 and up to $550,000 for new builds.

For the rest of New Zealand the price cap is $400,000 and up to $450,000 for new builds.

Sometimes, and especially in Auckland it is very hard to find a home that is selling for less than $600,000 and this makes owning your first home that much more difficult.

We have other options apart from the Welcome Home Loans too.

Banks are still able to do some first home buyers mortgages with less than a 20% deposit but are more fussy these days, then there are non-bank lenders that allow second mortgages so people can buy houses with less than a 20% deposit too.

This Week’s First Home Buyer

Just over a year ago I had a couple come and see me about getting a first home loan.

They had been looking around at various properties and had decided that they needed to spend $750,000 to get something that would suit them – a home in the area they wanted, large enough for them and in good condition as they are not the ‘handyman type’ people.

He was working and has a salary of $65,000 while she had recently gone back to work after having their first child and is earning $36,000 so together they were earning just over $100,000pa.

With their KiwiSaver and other savings they had access to a deposit of $72,000 so they looked to be in quite a good position.

However, when we assessed their maximum lending capacity it was about $580,000 which meant they were only going to be able to buy a home for up to about $650,000 which was short of what they needed to get into the first home they wanted.

But They Didn’t Give Up…

Often people give up on their dream of owning their own home and resign themselves to the fact that they will be renting for years to come; however this couple were determined to get into their own home and put in the extra effort to get there.

When we spoke to this couple and determined that they were not in a position to buy their first home we did the calculations to see how much extra income they needed. We calculated that an extra $10,000 of income would allow them to borrow an extra $100,000 plus the extra income would make things easier for them too.

So they went away with a goal of making the extra income, and came back to see me this week with the extra income needed.

How They Created Extra Income

Our clients worked out that they had a few hours available in the evenings and weekends.

They are both quite musical so they initially decided that they could provide private guitar tuition, but they needed to earn an extra $200 per week and charging $30 per hour for lessons meant at least 7-hours extra work per week was needed. It was going to be hard work both getting enough people at times that suited.

They were also good with computers and they had created a website for the guitar tuition, and then a friend had asked them to create a website for his small plumbing business. They created the friends website and saw this as an opportunity to make money, so moved away from music tuition to build websites for tradespeople. Like their friend, most plumbers are great at what they do but not so great at building websites!

Our clients now have a small business building websites for tradespeople.

There were two immediate benefits in having extra income – firstly the extra money helped save a bigger deposit, but more importantly the extra income meant they could afford the larger mortgage repayments so they could get the house that they really wanted. Of course it will also help them pay off their mortgage faster and there can be some tax benefits from having a business at home too.

An Easy Way To Create Extra Income

Of course, not everyone has the skills to build websites.

One thing that most Kiwis have done is purchased and sold items online on sites like Trade Me.

The online world has made it easier to buy products and there are now plenty of people that are making extra income, and even a full-time income selling online. A method that quite a few people are using is simply finding products online at wholesale prices and then listing the same products on websites like Trade Me or e-Bay at a retail price.

The difference in the prices is the profit after the selling expenses, but the beauty is you only buy the products after you have sold and been paid for the products. It really is a clever and low risk way to generate an online income. The secret is to get access to wholesale prices and this is where SALEHOO has helped.

You Can Do It ….

Like this couple, anyone can get into their first home if they are prepared to make the effort.

It can be one hell of a struggle, but it is not impossible. Lots of people have stories about the efforts that they have gone to to buy their first homes and even I have written a post on my personal blog about my first home and I can tell you that was a struggle at the time and for the first few years.

Looking back it doesn’t seem that bad…

Back then I didn’t have a computer and therefore knew nothing of the online world and trading websites like Trade Me and e-bay etc… To create extra income I had flatmates and worked long hours to try and make more.

Making money online is just one option that you could consider, but it will not suit everyone. For many people some extra hours or a part-time job may suit better.

It’s the high prices that make owning your first home harder today, and extra income can be a great help.

The post It May Be Hard But Don’t Give Up On Owning Your First Home appeared first on The Mortgage Supply Company.

The problem for many people is knowing what you can access.

KiwiSaver Withdrawals

KiwiSaver withdrawals are a relatively simple concept.

If you have been contributing for a minimum of 3 years into your KiwiSaver account and have never owned a house before, you are probably able to withdraw all of your money (except the $1,000 you may have received from the government when you started).

There are a few exceptions  if you’ve previously owned a house, for example – but the large majority of first home buyers fall into this category… more than 3 years… first home… then you’re eligible to withdraw your KiwiSaver funds.

There is no maximum income or purchase price on the new home for a KiwiSaver withdrawal (unless under 2nd chance criteria) but there is for any HomeStart Grants.

The HomeStart Grants

This grant was setup to help boost first home buyers into the market by giving them extra money to put towards their deposit.

There is some criteria with Housing NZ that you need to be aware of but the two major things that you need to know and may limit your ability to use a HomeStart Grant are income and maximum purchase prices.

Maximum Incomes

There are maximum incomes in place for those that want to access the HomeStart Grant which are;

• For sole buyers an income of $85,000 or less (before tax) for the last 12-months.
• Where there are two or more buyers a combined income of $130,000 or less (before tax) for the last 12-months.

It’s important to understand that this is your taxable income over the last 12-months not your current annual salaries. You can go to the IRD website and check what your taxable income was on your myIR services as this is what is used by Housing NZ.

Maximum Purchase Price for HomeStart Grant

The maximum purchase price differs depending on whether you’re buying an existing property or a new property.

• Auckland – $600,000 for an existing house, or $650,000 for a new house
• Other major towns and districts – $500,000 for an existing house, or $550,000 for a new house
• Rest of NZ – $440,000 for an existing house, or $450,000 for a new house

A new property is defined as having the Code of Compliance issued within the last 6 months.

If you have any questions you can either check the criteria on the Housing NZ website or contact a mortgage adviser.

Will KiwiSaver Withdrawals and HomeStart Grants Change?

I’m sure that over time the use of KiwiSaver withdrawals and HomeStart Grants will change, but at this stage they haven’t so we need to use what we have got.

Prior to the election the National Party had agreed to increase the HomeStart Grants in January 2018 but as they are no longer in Government we expect that this is not happening, and at this stage the new Labour led coalition have not provided any detail on what they plan to do to help first home buyers.

Of course we will be watching with interest and will provide updates on the Kiwi First Home Buyers Facebook Group as well as on this website.

Getting First Home Loans Approved

It seems daunting when you are buying your first home and then borrowing such a large amount of money.

As mortgage brokers we understand that it can be quite daunting and so we are there to help you through the process. Unlike dealing with a bank, when you work with a mortgage broker you get access to a range of options from the different banks. We can also access the Welcome Home Loans which helps when you need a low deposit home loan, and there are other bank and non-bank products designed to help in various situations.

This choices that brokers have ensure that you do not end up with the wrong loans from the wrong banks.

Of course being able to use KiwiSaver withdrawals and HomeStart Grants can make a huge difference and in most cases we know when you can access these.

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