Finance Commentary with Peter Norris

The process of securing the right mortgage to acquire your greatest asset can be a complex task.  Myland Partners caught up with Catalyst Managing Director Peter Norris for some insight to the benefits of seeking advice from a financial advisor.

Mortgage/Funding advice for first home buyers

There are three key points I’d like to suggest you think about as a first home buyer.

1. Before you apply talk to an advisor ahead of time, understand what is required to get ‘bank fit’ – i.e., what you need to be thinking about in terms of your current account conduct. Do you need to consolidate any debt for example? Don’t assume you know what the banks may require from you – an advisor will help you understand what you need to do so you can have time to prepare yourself.
2. Don’t be guided by the media, go and speak to an advisor. Right now the news is quite negative, and because of that people don’t act. They don’t realise they may actually be in a position to get the loan they want.
3. Try to limit external debts, HPs, overdrafts and clear the credit cards.

 

What is recommended – working with a bank or broker?

These days working with a broker is essential for the simple fact that every bank has different lending criteria. What they can lend to low-deposit buyers, what their interest rates are, how much they can lend, how they assess income – every bank is very different. It can be difficult to navigate this as a first home buyer. A mortgage broker’s role is to know what needs to be done to get approval across the line.

By working directly with a bank you limit yourself in terms of what is possible, whilst an advisor will be concerned for the best fit for you. The bank won’t give you advice, they just sell a product.  A broker will also provide a more personal service customised to your particular needs.

 

 

Funding requirements for new builds

Right now it is almost impossible to get low deposit borrowing from a lender for existing properties – banks still require a 20% deposit. However new builds are separate from that. A few points to note are;

• New builds are exempt from all the LVR restrictions, which means the banks are able to lend to people buying new builds with lower deposits
• This means there are incentives to buy new – you can do it with a lower deposit, lenders get more govt grants and in some cases you can get lower interest rates (some banks offer better deals with nee builds).

 

Further good news with the CCCFA being eased in June

The great news is from early June Kiwis can be less concerned about the strict lending criteria for a home loan. Less scrutiny and a bit more of a pragmatic approach will see a lift in applications for mortgages and whilst caution should be applied to spending habits – consumers can feel a bit more at ease with their Netflix subscriptions and take away coffees.

 

Advantages of a new build

We are huge advocates for new builds! Some of the reasons being;

• A brand-new home means lower cost of maintenance
• You’ll have building guarantees
• New builds are typically in a better area
• You are less likely to be buying over value and more often than not the house will be worth more when it’s finished that what you paid for it

 

An advantage of a new build with Myland Partners is they choose their builders so there is excellent consistency across the community.

How long have you worked with Myland?

I have worked with closely with Myland’s team for about five years and I love seeing the client outcomes. Myland are very good at producing a product that is affordable, and therefore caters to a wide range of the market. They build in really well thought out areas – with a lot of excellent commercial development surrounding the community.

 

They work closely with their clients to achieve a really good end solution. They’ve helped a large number of first home buyers into property who perhaps didn’t think it was possible.

 

Who is Catalyst Financial and how can you help

We provide full financial services, mortgages, insurance, investments and 95% of what we do is new builds so we understand construction finance.

• We are based nationwide.
• We know what banks need and want – ensuring you get the best loan for your circumstances
• We are fundamentally concerned to set clients up for long term success. We want to see clients buy their first house, then their second and help them build towards their retirement goal

 

We’re not just transactional and see clients as customers – we build relationships. People need to get advice – they need to be dealing with the right broker – a broker who is prepared to find a solution. There are so many lenders out there and you just need to be dealing with someone who understands your situation and how to go about solving it. Someone who is treating you like a client not a customer.