There are alternatives to banks!

And they are not bound by Reserve Bank rules! The 20% deposit for buying a home and 40% for investment properties are rules that only the major trading banks are obliged to follow.

We are able to help you arrange a mortgage through companies such as Resimac Home Loans and Liberty Finance. These boutique lenders have excellent track records and specialise in the not-so-ordinary circumstances or special requirements of clients. They are worth asking about as they could be a good answer if you don’t fit the strict mould required by the big banks.

House rich – cash poor

By retirement, many people have a freehold house but little or no money in the bank. The worry exists not only about how to ‘enjoy’ retirement fully but having to cope with events like housing/car repairs or health issues such as a hip replacement?

But if all your money is tied up in the house, how do you enjoy retirement? Historically, there were two ways to get cash from your home, being to sell up or to take out a standard mortgage. Neither is necessarily desirable.

There may be a third option. It has various names, but most commonly called a Reverse Mortgage. These allow you to take out a loan against your home that you do not have to pay back for as long as you live there. The amount you can borrow is dependent on your age and, like any other loan, the value of your property.

However, it is a very big decision to take this path of action as it eats up equity in the house. If you have a parent, grandparent or perhaps you may be considering taking one out, PLEASE have them talk to us first. Obviously no two sets of circumstances are the same, but it’s worth a good chat about it first. If it looks to be the right option, then we can arrange

The rules around building new are completely different and it’s worth taking the time to understand them

Building new is not subject to the same restrictions as buying an existing property and the addition of the Home Start Grant contributions make this quite an attractive option. But there are still a few notable aspects to this that you should be aware of.

The build process from start to moving in can typically be 12 months. The finance is given conditional approval for 60 days if in Auckland or 90 days elsewhere, apart from a “turn key” project which generally allows a 12 month approval. When this conditional approval expires, a new one must be gained. New conditional approvals will need to continue to be gained until the build is complete.

At the time of completion, a Code of Compliance is required, which is for your own satisfaction as much as the lenders. It is also required that a Registered Valuation is gained to prove the property’s value. This is why the deal will not be considered unconditional even after the deposit is paid.

It is also important to appreciate the risks of building new. As it can take anything up to 12 months, the Reserve Bank may change the lending rules in that time. If you are relying on borrowing the maximum amount of the house, this can very high risk.

We am not trying to scare you off the option of building, as it’s fantastic to move into a home you had a hand in designing. But it is critical that you are aware of how it works.