Monthly Archives: March 2022

Mortgage Broker Services

Four Important Services That Mortgage Brokers Provide For Life

This article discusses four of the many important services a mortgage broker provides. The majority of mortgage broker information out there is in the context of buying a new house. There are however, many services they offer after a house has been purchased.

Why should I use a mortgage broker service when I already have a mortgage?

After the mortgage has been advanced then it is the start of a life long relationship. Mortgage brokers actually provide a number of valuable services throughout the life of your mortgage. These services save you a lot of time, effort, money, and stress. It’s worth finding a good mortgage broker and maintaining a relationship with them. Then, when you need advice or support, the broker will already know a lot about your circumstances. They will be able to efficiently give expert help.

Re-fixing your Mortgage Interest Rates

Back when you first got your mortgage, you will have decided on the period to fix the interest rates for. Usually a mortgage is split into various accounts with different fixed periods. This is to minimise the impact of a sudden increase in interest rates.

When a fixed period comes to an end, if not re-fixed prior, the mortgaged amount automatically goes on the higher floating interest rate. But it’s not a hard deadline. You can at any point, chose to go from the floating rate back to a fixed rate.

The period you would chose to re-fix for depends on a number of things:

  • When your other mortgage accounts are due to come up for refixing. This matters in order to keep minimising the impact of increases in interest rates. Your mortgage broker can talk you through how the various timings of your fixed accounts fit together.
  • Your plans for the future. Any planned changes to your financial circumstances need to be taken into account. Your broker can talk through with you whether your plans mean a shorter or longer fixed period would be best.
  • The economic outlook. Are experts predicting interest rates will rise or fall over the next period? Of course, no one actually knows the future, and predictions are often wrong. Chat with your broker about the general outlook; how much weight you give to financial forecasts is up to you.

Once you’ve identified the best option with your broker, they can then liaise with the lender to complete the process.

tile showing services mortgage brokers offer
Mortgage advisers provide numerous services

Getting a Top-Up on your Mortgage

You can pull equity out of your mortgage by applying for a top-up. This means increasing your debt in order to free up cash. As you are taking on more debt this option isn’t to be taken lightly but there are plenty of circumstances where a top-up is appropriate.

The most common reason for a top-up is to fund repairs and renovations on your property as needed. As well as increasing the value of the property, it can make a big difference to your quality of life – especially these days when we’re spending more time than ever at home. Mortgage Brokers also know what to look for in a new mortgage application.

Whether this is a good approach financially depends on specific circumstances, but some common reasons are:

  • Upgrading worn and dated areas of the house, usually the bathrooms and the kitchen. Or your house may need an exterior/interior repaint or new carpet and curtains.
  • Future proofing. This is less fun than getting a new kitchen, but it’s important! We’re talking about replacing the roof, insulating, rewiring, fixing foundations or resolving water tightness issues. Getting on top of these jobs will save you the expense of future damage and will make your home safer and healthier.
  • Major renovations. Perhaps adding rooms to accommodate a larger family and increase the resale value, or an additional dwelling to make your property home and income. Making an older home open plan can also add a lot of value and result in many more interested buyers when you go to sell.
  • Elevating your living space. Swimming pools, outdoor kitchens, landscaped gardens. They take your home from being a house to being a sanctuary, a place that you can enjoy and someone would love to buy.

Your mortgage broker will explain the top-up process to you and identify whether you are likely to be approved, based on your financial circumstances. Importantly, they can calculate the long-term cost of adding debt to your mortgage so that you can make an informed choice as to the benefit vs the cost. Your broker will then manage the top-up application process with the bank for you.

Mortgage Adviser services
Mortgage Adviser Help – Top Ups for Renovations – Outdoor Living Spaces

Restructuring Your Mortgage

Ideally when you bought your home you will have structured your mortgage to suit your specific circumstances. Things such as your pay cycle, whether you receive a yearly bonus and whether you want your savings to offset your mortgage. Getting your mortgage structured correctly can save you thousands of dollars over the life of your mortgage.

But financial circumstances change, and your mortgage structure needs to change also to continue to be fit for purpose. Some common circumstances that result in a restructure are:

  • Your family is growing, and you need to make lower payments during a period of living on a single income.
  • You previously could only get a loan from a non-bank lender but now can get a loan at a bank with lower interest rates.
  • A pay rise may mean you can make bigger payments to pay your mortgage down faster and save a lot on interest.
  • A change in the markets may leave you with a fixed interest rate much higher than the current market.

Whatever your circumstances, your mortgage broker will help you identify whether a restructure is a good idea and make sure you understand any break fees that would be involved. They’ll then look at the options across the various lenders, identify the best options for you and then manage the application process.

Purchasing the Next Property

When go to buy your next home, or perhaps an investment property, don’t assume it’s best to stay with your current bank. Your mortgage broker understands the current offers of the various banks and can identify the best options for you. They’ll then manage the process with the bank. When it comes time to structure. Read further regarding getting a mortgage for an investment property.

We have highlighted only four core services. One of the things we love most about being a broker is developing a connection with clients and helping them throughout the years. If you’re looking for a mortgage broker to help you with either a current mortgage or to get a mortgage, apply now as we’d love to help.

First Home Grant

Can I get the First Home Loan or the First Home Grant? What you need to know

We’re all aware that there are more challenges than ever for first home buyers. So it’s important to know what support is out there and whether you are eligible when you start your first home journey. Two key options available are the First Home Loan and the First Home Grant.

What is the First Home Loan?

The First Home Loan is a scheme where the government underwrites mortgages. This means the government is carrying the risk of the mortgage instead of the bank and allows people with as little as 5% deposit to be approved for a loan.

What are the eligibility criteria to get the First Home Loan?

At the time of writing, to be eligible for a First Home Loan, you must:

  • Have a deposit of at least 5%.
  • Meet the income limits for the last 12 months. This is currently $95,000 or less before tax for a single buyer and $150,000 or less total before tax for 2 or more buyers, or for a single buyer with dependents.
  • Be a first home buyer or be in an equivalent financial position. This means no ownership in any other property (this doesn’t include ownership of Māori land).
  • Be buying a home you will live in. You cannot get the First Home Loan for an investment property.
  • Meet participating lenders’ eligibility criteria (income, debts, credit history). We can help you navigate this.
  • Pay a Lender’s Mortgage Insurance (LMI) premium of 1% of the loan amount.
Home approved thanks to First Home Grant

What is the First Home Grant?

The First Home Grant is a New Zealand Government grant, administered by Kāinga Ora – Homes and Communities. The grant is a cash contribution towards your deposit. Although it’s called the First Home Grant, people who once owned a house but no longer own property can still be eligible.

If you meet the eligibility criteria and are buying an existing home you get $1,000 for each year you’ve been in KiwiSaver, up to a maximum of $5,000.

The amount doubles if you buy a new home or land to build on, so you get $2,000 for each year you’ve been in KiwiSaver, up to a maximum of $10,000.

The grant is per person, so if you buy a house with a partner and your combined income is under the 2 buyer income cap, together you could receive up to $20,000!

What are the eligibility criteria to get the First Home Grant?

At the time of writing, to be eligible for a First Home Grant, you must:

  • Have contributed at least the minimum amount to KiwiSaver (or complying fund or exempt employer scheme) for 3 years or more. See KiwiSaver contribution requirements section for more details.
  • Meet the income limits for the last 12 months. This is currently $95,000 or less before tax for a single buyer and $150,000 or less total before tax for 2 or more buyers, or for a single buyer with dependents.
  • Meet the deposit requirements.
  • Not own any property (this doesn’t include ownership of Māori land).
  • Purchase a property that meets requirements, including your region’s house price cap. Check the property criteria here.
  • Agree you will live in your new house for at least 6 months from the settlement date, or for a new build, from the date the code compliance certificate is issued.
  • If buying a property with other people, be buying an equal share.
  • Provide proof of deposit, income and KiwiSaver contributions.
  • Be over 18.

Previous home owners in New Zealand or overseas may still get the First Home Grant. To be eligible, as well as meeting the standard criteria above, you must:

  • Have not previously received the First Home Grant or its predecessors, the KiwiSaver HomeStart grant or KiwiSaver deposit subsidy.
  • Have total realisable assets worth less than 20% of the house price cap for existing properties for the area you are buying in.
Savings from First Home Grant

How does the First Home Grant Work?

You apply for the First Home Grant on the Kāinga Ora website page. As part of the application process you will need to provide proof of deposit, income and KiwiSaver contributions.

You can apply for pre-approval before you look for a house. This is the recommended way, as it gives you certainty that you will receive the money when you find the right property. It also removes the time pressure when pulling together the documentation to support your application.

If you’ve already got a signed sale and purchase agreement, you can apply for a full grant approval as long as you apply at least 4 weeks before settlement day.

Next Steps

We can help you with your First Home Loan and First Home Grant applications as part of managing the mortgage process for you. Get in touch today for a no obligation chat.