Mobile Mortgages

Last week an application for a long term self-employed borrower with clean credit, a strong deposit and very good bank account conduct was presented to one of our specialist lenders. They did not require GST returns as the applicant was not in a GST registered profession.

They approved a $450,000 mortgage over a residential property being purchased for $650,000 (RV at $640,000 = 70.31% LVR) using the new No Financials 75 product.

The loan was approved 9 October and will settle on 16 October.

What is your property worth?

If you fail to meet your interest payments, your property provides the bank with security. They are allowed to take control of it and sell it to recover the money they leant you in the first place, plus any interest you have failed to pay.

The bank therefore needs to know that you property is worth more than the amount they are lending you. Otherwise they might sell it and not get all their money back.

If the amount you want to borrow is small compared to the value of your property, the bank may not need proof of the value of the property. As the amount gets bigger in comparison to the property’s value, the bank may ask for a rates notice – which gives the council valuation for your property. This is held to be a general guide to the property’s value, but not strictly accurate (as it may be up to 3 years old).

If the amount is large in comparison to the value of the property, banks will typically require a valuation to be done by a registered valuer. A valuation more than six months old is held to be outdated. One that is three to six months old may be accepted, or may also be deemed outdated depending upon the lender

The most common mortgage types are ‘Principal and Interest’ and ‘Interest Only.’

Principal and Interest is a loan where you are making payments of the interest for the amount borrowed, plus repaying small amounts of the amount itself (the principal). Therefore the amount of money you owe slowly reduces.

Interest Only is a loan where the only payments you are making are for the interest itself. The amount of money you owe remains unchanged.

Fortune Manning is a long-standing provider of legal services to Auckland City. Our recent wins at the NZ Law Awards confirm that we are a firm well recognised by our clients and our peers for providing exceptional service at a realistic price. We’ve been committed to enlarging and refining our skills for more than 100 years and we will provide you with professional advice in a prompt personalised manner.

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I read this article a day or so ago about the Australian market and didn’t really think it had much relevance here however over the last few days I have read other reports about how well the New Zealand property market is doing and this raises some concerns for me as I read between the lines and listen carefully to the language the economists and media are using.

Here is the article.
Friday, 04 September 2009
Loan Market Group has claimed that almost 20 per cent of Australians would not be able to afford higher loan repayments should rates hike.

According to a recent Loan Market survey, 19 per cent of the 600 respondents said any increase in interest rates would push them over the limit.

More than 40 per cent of respondents said they would be able to cope if the RBA raised rates by the projected 2 per cent.

“It should be of concern to the RBA and to the federal Government that 57 per cent of respondents said they can’t afford rates to go up another two percentage points,” Loan Market Group executive director John Kolenda said.

Chris Straw, from aggregation group Niche Professional Services, said the Loan Market Group statistics did not entirely align with recent market conditions.

“Lenders are more prudent than ever and have made approvals harder to achieve,” Mr Straw told Mortgage Business.

“There are always going to be pockets of people that will struggle – people that took advantage of the first home owners grant may find themselves pushed to the limit if interest rates rise, for example – but on the whole I think borrowers are better off than they think.

“The only time borrowers would find themselves in real strife is if they lost their job, but figures suggest the threat of rising unemployment is now abating.”

Mr Straw said brokers should take into consideration a customer’s capacity to repay a mortgage considering the threat of rate rises and give them advice as to how they can counteract substantial rate rises.

“Most importantly, brokers should factor in potential rate rises when establishing the maximum rate their customers can afford,” he said.

Amit Verma

Mortgage Manager

Location

Mount Roskill – 1234 Dominion Road, Mt Roskill, Auckland

Contact

Phone: 09 524 3918
Mobile: 029 814 1990
Email: amit_verma@bnz.co.nz
Fax: 09 976 1806

Name: Vanessa Murch
Location: Auckland, South/East
Mobile: 027 532 6944

Auckland, South/East

Name: Jeremy Eagles
Location: Auckland, CBD
Phone: 09 374 5725
Mobile: 027 229 6274

Auckland, CBD

Annette Boucher
Phone: 09 430 2567
Mobile: 027 209 0312

Northland: Mobile Mortgage Managers

David Lloyd
Phone: 09 833 3670
Mobile: 027 244 3599

West Auckland: Mobile Mortgage Managers