The Great Summer Shutdown!

Nearly the entire country used to close down at Christmas and half January. Finding a lawyer before school started again in February was nearly impossible. Then for some reason things changed. Now a handful of lawyers coming back early and skeleton staff at banks.

But they are not at full strength, so please don’t think they are. Lots of houses change hands in January, and if it your intention to go into the new year with a new house, then please prepare now. I know it’s only November, but kick the process of now and it will be smooth sailing into the new house.

Call me to assess your current loan and what you can or what you want to borrow for the new house. I can then contact lenders before they all disappear on their well-earned break with their families. This being established, you can then start the house search and not be hampered by the great summer shutdown!

Mortgage = Death Pledge – how to not make it one

The words mort-gage translated from Latin into English literally mean Mort (Death) and Gage (Pledge). In the days of the French Peasants people were working until they died to keep a roof over their heads. A Mortgage in legal terms is a legally bound agreement where the bank or lender, lends money in exchange for taking the title over the borrowers property with a condition that the title is transported back to the borrower upon repayment of the debt.

When we are borrowing, we are in fact taking out finance or a loan, not a Mortgage which is a legal debt instrument used to put the finance in place.

So, do we need to pledge to have this “Mortgage” hanging over us until death do we part?

A home loan is something that the majority of us need to purchase the security of a roof over our heads. It’s also the reality that it’s a product we wish, a soon as we have one, that we didn’t. So how do we get to that place we all dream of, being debt free where we can spend our cash on other things aside from finance interest, or reconsider our employment options and perhaps cut our hours back taken lower expenses.

Finance products are constantly changing and understanding which one is best for your personal situation can be daunting. Despite finance products being deemed “simple” when compared to say Investments or Insurance products, the ins and outs of finance products are often not understood and the features and benefits not used to their advantage in debt reduction and the journey to be debt free.

Take one of our business partner’s floating interest rate products where there are 4 options to choose from. Choosing one depends on the way you like to manage your money, your cash flow and projected income and expenditure, and what you feel interest rates may do in the future. It’s definitely not as simple as one is as good as the other and good solid advice is advisable when structuring your loan to maximise the reduction of interest.

It’s often interesting to see the behaviour of some consumers who change lending provider to save a small amount of interest. They forget the cost of conveyancing, the inconvenience of changing bank accounts and payments and forming new relationships, not realising that doing a budget and understanding their own personal cash flow and increasing their regular payments can save them much more in interest and a reduction in loan term, escaping them from the “death pledge” likely much sooner than a small drop in interest rate ever will.

If you are looking at taking out finance or already have or know someone with a loan who could benefit from our advice, we’d love to help them try to make the life of their loan shorter.

What will 2017 bring?

Before you launch into buying gifts, the Christmas dinner and confirming your holiday plans, do a quick review of where you will be going next year. Will you be looking for a new house? Renovating your existing house? Taking an overseas trip? Perhaps looking to buy an investment property or a new car.

Perhaps you will be losing an income due to you or your partner not working or changing jobs. Whatever your big plans for 2017 are, if it involves debt or changes to your income, then plan ahead. I’m happy to give you my thoughts on the best way to finance these plans or to review your mortgage should you wish.

It’s not just all about mortgages

As well as arranging mortgages, a quick reminder of my other services: I am able to set up or switch Kiwisaver accounts for you. You may like a review of the performance of your current provider and prefer a better performing one. Ask me about it.

For your elderly relatives, ‘Reserve Mortgages’ are possible. These are where they don’t pay them back, but take the interest out of the equity on the home they are held on. They can be a great way to free up some cash for a more comfortable retirement.

And back on the subject of mortgages, I have access to ways that overcome the LVR restrictions, being the 20% for owner-occupied homes and 40% for investment properties.

Ask me about any of these. My services are free as I am paid by the lenders