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Wayne’s words of wisdom

Having seen some of the profits that the Big 4 have announced, we can all feel a little aggrieved that it is in fact our money making up those enormous funds now being divvied up to shareholders. Yes they are a business – and obviously BIG BUSINESS, not the local friendly bank on the corner that their marketing teams may want us to believe.

No - they are a business and as such have an obligation to their shareholders to increase profit year on year. Ever increasing fees, interest rate changes that don’t always seem to provide the full benefit of the Reserve Bank cash rate reductions - nothing changes – this is the business of banking.

And while you may throw your hands up in despair and think you can do nothing – the reality is you can. A little time with us, some focus on what you want – not what the banks want – and you could in fact save yourself thousands.

One key action lenders strongly encourage, of which we take a more personal and flexible approach to, is FIXED LENDING. 

Locking in fixed interest rates for 3,4 or 5 years may provide for supposed security ensuring you know what is expected each month however that can come at a financial cost – to you! By locking in for longer terms the opportunity to change your lending and take advantage of any potential rate drops throughout your fixed period may come at a significant cost – break fees. These costs can be exorbitant and run into many thousands of dollars. Even a 2 year fixed period may be too long depending on your personal circumstances.



The #1 MISTAKE people keep making...

If the first thought you have when you think ‘mortgage’ is ‘interest rates’ – you might have made that one simple mistake many people make when considering a lender. Most people look for the lowest rate and think – “Great I can get a deal!”

The reality is you may very well end up paying more interest than the person who chooses a different rate and different FEATURES. Features that can work in your favour and that you need to be aware of can include:

FEE-FREE EXTRA REPAYMENTS - Paying just an extra dollar a day off your loan will result in significant savings in interest and see you mortgage-free far sooner. That makes increasing repayments (at no extra charge) a feature worth having.

PORTABILITY - This allows you to sometimes transfer your existing loan to the new property when you move house, meaning you could avoid having to pay break costs for your old loan or establishment fees for a new loan. However this may not be an option or may be a more costly alternative when all factors are considered.

REDRAW FACILITY - Provides access to any additional repayments you’ve made. Handy if you’re short of cash in an emergency, but it will put you behind in terms of interest savings.

MORTGAGE OFFSET OR REVOLVING CREDIT - An offset or revolving credit account lets you put any savings to work to reduce your loan interest charge. The balance of your savings is deducted from the loan when interest is calculated, so you pay less interest, with more of each repayment reducing the loan balance.

MORTGAGE HOLIDAY -  This feature offers a complete holiday from repayments or a period of reduced interest only repayments. This can be especially useful during career changes, ill health or breaks such as maternity leave. Ideal to include if you are just starting out and having a family.

So before you or someone you know makes this mistake – give them this newsletter or tell them to head to our website and get in touch with us so we can help them.



The CREDIT CARD Challenge

Did you know that when you apply for a mortgage, lenders factor in a 3% monthly cost on all credit card limits (not the actual debt)?

General ‘Rule of Thumb’ - Your credit card limit will impact on the amount a lender will loan you. Every $1,000 card limit, will result in a reduction of approximately $4,000 that you can borrow on a mortgage. So a $10,000 credit limit will reduce your mortgage borrowings by about $40,000!

We get that lenders are being careful not to overload you with debt…..

So why is it, one of the first things most new customers get offered by their bank when they secure a mortgage is a new shiny credit card!?

This highlights the irrational thinking of lenders who will ask potential borrowers to reduce credit card limits as a condition in their loan offer – yet within weeks of the mortgage being advanced will be inviting clients to either take a new credit card facility or increase their existing limit.

To add some sting to the process, many lenders then promote/ market themselves further and make contact congratulating customers on being valuable clients and advising them their credit card limit has been automatically increased as a result.

Doesn’t make a lot of sense does it – first asking you to reduce your debt – and then trying to get you to increase it! Legal? Yes. Irresponsible? In my opinion yes and contradictory to the lenders requirements at the time of loan assessment.

Makes you think though – should the bank be your first port of call? Or should it be Wayne?


Wayne Scoops Another Award

Wayne received the award from the Lending industry and his peers because of his “consistent top performance in both quantity and quality of mortgages written.” Scott Black, CEO of SHARE, commented that “Wayne is an asset to SHARE and a worthy winner of this award.”

Wayne receiving his SHARE Mortgage Adviser of the Year award from Sarah Dowie (MP for Invercargill) at Parliament during the recent annual SHARE Conference held in Wellington.


The TPPA as we see it

A lot has been in the media regarding the Trans Pacific Partnership Agreement (TPPA). Finding out what it stood for was easy, finding out what it actually involves is more difficult.

This seems to be the crux of the matter when it comes to the discord a lot of people are feeling – and we note this isn’t limited to New Zealanders – it is purely the lack of the FULL FACTS that is causing the angst. We live in what is coined as a ‘Global Society’ and like any coming together of differing ideas, opinions and self-interests – questions should always be asked.

In our view, on the Pro side of the fence – the prospect of more export opportunities and business growth and all that is attributed to that,employment growth, financial stability, and the list goes on.

On the Negative side – the open market pushing up house prices as overseas buyers with stronger economies buy ourland. (It has been noted that in many countries, whilst you can lease land you cannot own it like you can here in NZ, so with land being seen as a commodity, this is an area of concern for some).

As a team, and as a business, we would like to say that we have made a clear decision about the side of the fence that we are sitting on. But we can’t, for one simple reason – we don’t have all the facts.

It is hard to vote for or challenge an idea when only partial facts are on the table. And there lies the crux of the issue – LACK OF FULL FACTUAL INFORMATION. Similar to securing a home loan, unless you have all the facts then that seemingly low interest rate could have some hooks that you only discover after the deal has been signed.

Or that bonus offer the bank is promoting doesn’t provide all of the information and you could end up paying more than necessary. Any deal that is on the table – unless it’s a game of Poker – shouldn’t be a gamble. It should be factual, with all of the information provided so both parties are clear about their roles, responsibilities and obligations.

Our job as Mortgage Advisers is to ensure ALL the FACTS are on the table and you know exactly what you are signing BEFORE you sign it. Perhaps, if the TPPA teams across the globe understood this more and presented the FACTS first before asking us to vote, agree or support this deal, there would be less angst.

Contact the team who can help!

"Hi Wayne

Good on you for spreading this message. I agree that it's really important the more NZers are made aware of what's going on. Everything I've read on the TPPA (from non-govt sources) says it's a very bad deal for us and has some potentially damaging aspects for the future.

And I think more people in your position need to get behind this, as it's mostly seen as a pro-business deal.

Thanks for doing your bit."



Accessing Your KiwiSaver™- The FACTS

If you, or perhaps your offspring, are wanting to buy your first home and don’t quite have enough saved, then consider utilising your KiwiSaver™ to boost the funds. In many instances today, KiwiSaver™ funds eligible for withdrawal form by far the greater portion of a first home buyers deposit funds and often the entire deposit amount.

You may be able to withdraw the current value of:

  • Your contributions
  • Your employer’s contributions (voluntary and compulsory)
  • Returns on investment, and
  • Any member tax credits.

Provided you leave a minimum balance of $1,000 in your account.

In some cases, even if you have owned a home before, perhaps whilst in a relationship that has since broken down, you may be able to access your KiwiSaver™ to purchase your first home in your name only.

Talk with us so we can assist in providing the full facts allowing you to make the best decision about your future home ownership.


The TPPA – Global implications on housing?

We live in a Global economy. The implications of Trade Deals are widespread and in some cases unknown. When an exporter can secure a higher price for their product in an overseas market than they can at home, then they are going to sell at that higher price. Housing is no different in this respect and constantly increasing prices are being driven in a similar manner.

In this edition, we have some questions around the TPPA and its impact on New Zealand, and you might be surprised at our analysis. We focus on what makes for good decision making when it comes to borrowing money and how protecting your assets is often overlooked. And of course we provide you with the facts that will help when using your KiwiSaver™ savings toget on the property ladder with your first home purchase.

Contact the team at any time with any question – we are here to help in any way we can.


Celebrating success & history made!

You may remember our last edition when we highlighted our support of Ella Ransley and the 2015 New Zealand U19 Women’s Lacrosse team. The team needed some support to get to Edinburgh and approached us to see if we could lend a hand.

Their dedication, enthusiasm and commitment to perhaps a much overlooked and unsung sport amongst Kiwis helped us make the call to get behind this team. The World Cup played out in August with the best teams in the world vying for the top spot. Showing that inspiring Kiwi determination to beat the odds, this team moved from a previous ranking of 11th to being 5th in the World. The girls played hard but they played fair and the strong team bond and sportsmanship was noted by each of the game commentators.

Well done to Ella and the team – you did us proud – but more importantly, you did yourselves proud!



Quick Note December...

  • Our focus is on securing mortgage lending, however our strong industry standing means we have the ability to also secure great pricing for your Insurance needs as well.
  • We work closely with Hayley Kerr, a Risk Insurance specialist based in our Frankton SHARE office. If you need Life, Income Protection, Health & Hospital cover Hayley is the expert you should see. We also work closely with Tower Insurance for all your House, Contents, Vehicle & Boat insurance requirements and we can arrange for Tower to contact you.
  • Both Hayley & Tower Insurance assist us to meet our own criteria of providing excellent customer service which is top of our list – and competitive pricing which we are sure tops your list when it comes to protecting what’s important!
  • Don’t forget our referral rewards offer highlighted earlier. Where successful, referrals will result in a $100 gift voucher reward to the referrer and go in the draw to win a $750 travel voucher.
  • Also don’t forget to contact us not your bank when your current fixed rates expire or you want to fix a floating rate. We will look after your best interests not the banks and advise you appropriately.

Holidays can feed the soul

Having spent my own time travelling, I know the joy of meeting new people, visiting distant places and being inspired to do more. Holidays shouldn’t just be the annual Christmas trek to the beach.

However we know that it can be challenging making the budget stretch – and that’s where we like to help. When you tell other people about us – it helps us – and we would like to thank you for that.

As a way of reward anyone that refers a new client to us, who then settles their mortgage using our services, will not only receive a $100 gift voucher but will also go into our 6 monthly draw to win a $750 travel voucher.

And here’s our most recent winner: Don & Marilyn Jessen

By telling their daughter to contact us, whereby we were able to help her and her partner into their own home in Wellington, Don & Marilyn can now start planning a little break for themselves.

TIPS: You can refer as many people as you like – each one is a new entry giving you more chances to win - and each referral gives you a $100 gift voucher.

It’s easy – no forms or paperwork – give them our number and tell them to inform us who referred them. We do the rest!

As the referrer you can be an existing customer or not. And your friend or family member does not need to live in the Waikato – we can, and do, help people ALL OVER NZ! ALL OVER THE WORLD IN FACT!!



SHARE -Supporting NZ Champions

Always the Champion of Champions, Wayne is proud to be able to provide some sponsorship to top level New Zealand Representative Ella Ransley.This month Ella will achieve the goal she has trained towards for the last four years – to travel with the NZU19 Lacrosse team to Edinburgh, Scotland for the Lacrosse World Cup. With a stopover in the USA to play some ‘warm up’ games, it will be an intense month that will push the players to their limits.Lacrosse is a fun, fast paced game, combining speed and technical skills. This is nothing new to Ella – she is also a highly ranked hurdler in NZ youth Athletics.

Go Ella! Make NZ proud!

 


NO COST - NO FUSS!

Abigail Jenkins is our dedicated administrator who will ensure lenders provide us with their most competitive interest rates when your current fixed rates expire. You will be referred to Wayne to discuss what rate and term will best suit your needs.

Come to us for impartial advice when re- fixing – we look after YOUR best interests; not the bank’s. Send us an email and we can help – no cost and no fuss.

 


SHARE Ruakura

Our SHARE offices are located at Ruakura Research Centre. Easy car parking and a great coffee shop across the road are all available on your next visit.

We are aware that some of you may be confused by the other SHARE offices located in Hamilton. While they are part of the SHARE network of professionals they are separate businesses to ours.

 


Quick Note...

  • LVR restrictions – proposed changes from 1 October. For all areas outside of Auckland the Reserve Bank will relax restrictions with 15% of all new lending to be allowed above 80% loan to value ratio. Auckland’s restriction will remain at 10% only, which is the current limitation for all of New Zealand. In addition, the purchase of any residential investment property in Auckland will be limited to a maximum 70% lending level. Again, in other areas, lending will be allowable to 80% of purchase price.
  • Auckland property prices continue to skyrocket. Where and when will it end and how is it going to end?
  • Dairy farming returns continue to plummet. Payment for the season just ended will be around $4.40 per KG of milk solids compared to $8.50 per KG in 2014. It is expected that the new season will not see any significant change with returns in the $4 - $5 region again.
  • The OCR is down another 25% and economists are picking that it will reduce further. Floating rates are currently sitting between 6.00-6.50% pa. We expect these rates to be somewhat lower than that before the end of this year. We are now able to source fixed rates below 5.00% pa for shorter terms through most lenders.
  • Many countries are experiencing tough times.Greece has been in the news and others are struggling to maintain solvency. China and
  • Australia – our key export markets – are also experiencing slowing economies. Supply and Demand cycles are being interrupted.
  • These factors influence our economists who strive to maintain the stability that the NZ consumer expects.

KiwiSaver™- A Vital Link for Home Ownership and Retirement

There are still people unsure and unaware about how to use their KiwiSaver™ fund for home ownership. This is an area in which we can assist and invite your calls to do so.

We work with borrowers of all ages. Some may be about to embark on their first home purchase and need to access KiwiSaver™ funds to assist in their home ownership application. Others may be existing or previous home owners who have experienced a broken relationship and now want to re-enter the home ownership market individually. In certain circumstances, these borrowers are able to access their KiwiSaver™ funds under the Second Chance option available.

Like many government initiatives, there have been changes to KiwiSaver™. Being aware of these changes allows you to take advantage when it is relevant to you. Here are the latest tweaks to what we believe is a fundamentally solid retirement programme with great benefits for the ‘here and now’.

  • Anyone who is employed between the age of 18 and 65 and is earning a regular income should be a member. Forget that the Government no longer give members a $1,000 kick-start contribution at the time of joining. Don’t be discouraged – there are still so many benefits!
  • Currently 3% of your pay goes in as automatic compulsory saving. You can – and should – look to top this up when circumstances allow.
  • Your employer contributes 3% to your fund. This is a 100% return on your investment.
  • Each year the Government contributes a lump sum of $521.43 to your fund as a member tax credit, providing you contribute a minimum of $1,042.86 annually to qualify.

On top of this, your Fund Manager should be rewarding you with a return on your investment as well.

Where else can you receive in excess of a 100% return on your investment? What a fantastic way for first home buyers to save a deposit for their house.

As a first home buyer (or in some cases – a second chance buyer) you can access all of your personal and employer contributions, except the initial $1,000 Government kick-start contribution, as your deposit funds for a house purchase. In addition, you may be entitled to a Housing New Zealand Grant to a maximum of $5,000 (or if building a maximum $10,000).


To find out more about how to make your KiwiSaver work for you, please contact us.


Waking Up to the Banking System

Banks don’t stop. In fact, they are continuously contacting (some suggest pestering) our clients who have fixed rates expiring, with offers of:
  • A specialised team – of people you know and trust?
  • Good rates – compared to?
We applaud that banks have finally realised that they serve consumers, customers and clients. However, we still need to highlight the obvious differences between what we do and what a bank simply cannot offer.
  1. We know what is available within the market – not just within a single bank
  2. We know what different offers are on the table and what will suit you. We spend time to find out what your needs are, as opposed to what we have to offer.
  3. We listen to what you need. We say what we believe, drawn from listening to your needs, coupled with our vast experience and training.
  4. We don’t focus on meeting KPI’s or Sales Targets. We look in-depth at the market’s behaviour and how different scenarios may impact you if you fix or float.
  5. We are free to you – there is no cost built into our service.
  6. We are comprehensively aware of what’s happening in both local and overseas financial markets and economies.
The reality is we give you options and financial information which provide you with knowledge!

Call the team who can help!

Wayne

PLEASE READ...
All borrowers should use the service of a mortgage adviser to ensure they obtain the best impartial advice on all aspects of their mortgage, at no cost to the client. This means you or the ones you love and care about.


Winter Warmer with a little Money Business thrown in!

This winter warmer newsletter will definitely provide interesting discussion in the coming weeks. We see many of you coming off fixed rates; looking to secure some of the tempting low rates being advertised. It’s a consumer’s market and as the consumer we suggest that you start calling the shots. To do that, you need the right information and advice. If you have any questions after reading this, feel free to get in touch – we are happy to help!

Quick Notes

Petrol price drop – making it easier on the average household. Would be great to see transport costs come down to reflect the drop.

Fixed interest rates falling – how far is yet to be seen – however with a belief they will remain around this level for the next 2 years we would be suggesting fixing for up to 24 months to take advantage of the low rates without risking a sudden rate rise.

Milk Payout has decreased – although not great for our farmers, it is slightly balanced against the lower lending and lower petrol costs.

Rock Star Economy – our experience is ‘steady as she goes’ and that the so called “Rock Star” economy mentioned by the media is not reflected in the bottom-line profit of businesses outside Canterbury and Auckland. Most are no more profitable now than they were in 2007.

Seven years on from the onset of the Global Financial Crisis (GFC) in most countries the debt to Gross Domestic Product (GDP) ratio is now higher than it was before the GFC. A report by consultants McKinsey & Co titled “Debt and (not much) De-leveraging” says that between 2007 and the second quarter of 2014 global debt grew by US$57 trillion, or 40%, to US$199 trillion – sobering and frightening stuff.


Important KiwiSaver Changes - the facts

These come into effect 1st April 2015. Changes and amendments to KiwiSaver will affect both the first home withdrawal entitlement from a Kiwisaver account and the separate first home subsidy administered by Housing New Zealand.

Until now if you were to buy your first home and access your KiwiSaver funds there has been a limit on what you could withdraw. You have only been able to withdraw:

• Your own contributions. 

• Your employer’s contributions.

• Any investment returns from those contributions.

From April 1 2015, having been a KiwiSaver member and contributor for 3 continuous years or more, you can now also withdraw the annual member tax credits of $521.43 per annum. The only portion you cannot withdraw is the initial Kick-start payment of $1,000 made by the Government. This provides you access to more of your funds allowing you (or your offspring) greater opportunity to get into the property market.

The other significant change that impacts home owners is that from 1 April 2015 the first home subsidy will be replaced with a new Kiwisaver Home Start Grant.

The Home Start Grant allows people buying a newly built home to access double the previous subsidy. This should stimulate some property growth with increased lending for new housing construction. Remember this is for FIRST HOME BUYERS and provides another option to assist with home ownership.

The existing Grant will remain unchanged from the current First Home Subsidy for persons purchasing an existing home.

The house price cap levels for Home Start Grants and Welcome Home Loans have also been increased to be more in line with actual property prices.

• Hamilton, Tauranga, Wellington and Christchurch are now capped at $450,000

• Auckland - $550,000. 

• Most other areas - $350,000. 

The Home Start Grant and Welcome Home Loans are NZ Government subsidy programmes that perhaps aren’t as widely advertised or understood as they should be.

Our job is to see if these programmes can offer you or someone you know the assistance they need to get into their first home. To find out more about these programmes contact Wayne


Landlords being stung by banks!

LANDLORDS being STUNG by banks!

Banks are calling in loans from one property when another is sold. If you are a landlord considering selling a property to release capital, you should first be clear how much money your bank will let you keep.

If you have an “all-obligations” mortgage and a number of properties and loans, you could be seriously affected. We’ve been called a few times in the past month by some of our existing clients regarding this and are urging other people in this situation to make contact and let us check your loan documentation in order for us to assist if we can. The last thing you want is to sell an asset to release some capital and find you are left out of pocket when you need it the most. 

Lenders will often require an “all obligations” mortgage where a client owns more than one property and has several loans. They will endeavour to cross-collateralise security over all properties. This is why it is important to spread your borrowings across a number of lenders and is something often overlooked by the majority of property investors.

If you are being affected by this, call us and let us provide you with some experienced advice and support. 


Get in touch

 

Our advice comes supported by many years in the mortgage and insurance industries. So contact us today!

0800 800 333  wayne.oliver@sharenz.com
 sarah-jane.reay@sharenz.com

07 856 2960  
07 856 2962    

This website is for general information purposes only. We encourage you to
call us or email us in confidence with specific questions.
 

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