Category Archives: Mortgage Declined / Bank Said No

Mortgage Application Rejected , Home Loan Denied, Declined Home Mortgage

How soon can you re-apply after your mortgage application was declined?

We hear the phrase “My mortgage application was declined” on almost a daily basis. With the current tight lending rules, having a mortgage application declined by the bank is an all too common occurrence. It can be very discouraging, but don’t lose hope; there are usually options available to overcome your home loan obstacles.

It is not over if your mortgage application was declined

It’s usual for a bank to require a 3-6 month stand down after they decline an application, after which you can reapply. They’ll inform you of the actual period as part of the application process. But (more importantly) there is nothing to stop you applying straight away with another lender. The key thing is to understand why you were declined by your initial chosen lender. You can then take any action needed to rectify the issues.

Form showing mortgage declined

The importance of using a mortgage broker

We realise that a mortgage broking company saying you need a mortgage broker is hardly impartial advice. But our reasoning is compelling. Your mortgage broker will be able to look at your situation and walk you through why you were declined previously. They’ll then be able to advise you on what needs to be done to be successful in getting a home loan. They’ll look across all lenders, and with their industry knowledge of what the current acceptance criteria is from lender to lender, they’ll know where you are likely to be approved. This is huge, as lending criteria is individual to each lender and it changes all the time.

Understand why your mortgage application was declined

The majority of applications get declined due to one or more of the following reasons:

  • Not enough deposit
  • Not enough income
  • A bad credit score

Once you understand why you were declined, you can discuss with your mortgage broker whether a different bank may accept your application. The banks each use different formulas when assessing whether a mortgage meets their “affordability” threshold. An application could be rejected for not enough income at one bank but accepted at another. Banks sometimes offer mortgages at under 20% deposit, your mortgage broker will know if this is an option currently available and whether you would meet the criteria.

If none are likely to, that leads us to…

Banks aren’t the only option when looking for a mortgage

The stringent lending rules among the banks can mean that an applicant who is perfectly capable of servicing a mortgage still gets declined by the banks. This is where a non-bank lender/second tier lender can be a good option. They accept many applications that the banks decline. The flipside is they charge higher interest rates, but many people find it a worthwhile compromise to get on the property ladder.

If you do go with a second tier lender, make sure to make a financial plan to get yourself in a position to move to a bank within a couple of years to avoid paying higher interest long term.

Non-bank lenders are often a good fit if:

  • You’re newly self-employed. Usually the banks don’t approve lending to someone who has been self-employed for less than two years.
  • Your income doesn’t meet the banks’ standards (but is still high enough to service a mortgage without hardship).
  • You don’t quite have enough deposit for the banks.
  • You’ve been recently discharged from bankruptcy.
  • You have a low credit score.
Mortgage denied

What to do if you don’t currently meet the lending criteria or your home loan is declined

Next steps if you don’t have enough income

Reducing any debt is often the best place to start increasing your income. The banks minus any loan repayments when calculating your mortgage, and they assume the repayments will continue indefinitely. So if you’ve got any loans close to being paid off it could be worth doing so sooner rather than later. Of course, this could eat into your deposit so it’s a balancing act.

The banks also assume any credit cards or overdrafts will be maxed out. Therefore they calculate your income on the basis you will be making the maximum payments each month. They don’t take into account whether or not you pay your credit card off each month. Reduce your credit limits where possible, or better yet, cancel your credit cards and overdrafts.

Beyond reducing debt, increasing income can be tricky. Kiwi’s aren’t great at asking for a raise but if you can find the courage then it could be the difference between getting your own home or not. Look for opportunities for career progression within your job or even a job change if it will provide more opportunity and salary. We know these are not easy changes to make! If you do decide to go for it, make a plan and break it down into steps. Focusing on one step at a time will make the big moves feel much more manageable.

Next steps if you don’t have enough deposit

If you don’t have enough deposit, make sure you’ve looked into using your KiwiSaver and whether you qualify for the First Home Loan or First Home Grant. If it’s a matter of saving more, then make a budget and put savings aside regularly. An automatic transfer of your budgeted savings to a separate account each pay day can really help you stay on track.

Next steps if you have a bad credit report 

As advised previously, second tier lenders are often a viable option for those with bad credit scores. Don’t assume you don’t have borrowing options without first speaking to a broker.

If you have a bad credit score, make sure you check the details are correct. It can be a challenge to get them rectified, but is worth pursuing it if it changes your score from bad to good.

If your report is correct then it becomes a matter of improving your credit score. This means reducing credit limits, paying bills on time and paying off hire purchases! You could even consider completing a debt consolidation to reduce the overall interest rates being paid.

Ultimately, the steps you need to take and the options available to you when applying for a mortgage are very much dependant on your specific circumstances. So we hope we’ve convinced you that a mortgage broker is advisable whenever you are looking for a mortgage, but especially so if you’ve been going it alone and have had a mortgage application declined.

Platinum Mortgages specialises in mortgage solutions for those who can’t get straight forward approval from a bank. Reach out for a no-obligation chat about your circumstances and whether we can help.

Got Bad Credit And Want Your Mortgage application approved?

This article addresses the question often asked – can I get a mortgage even though my credit history is poor? Credit scores are out of sight and out of mind for most of us. Until, of course, it’s time to get a loan and it becomes an issue. While a bad credit score certainly makes it harder to get a mortgage, it is still possible. So you want success and see how to get a mortgage with bad credit? Then read on.

Can I get a mortgage with bad credit?

In fact, we specialise in exactly this type of tricky mortgage application. Getting a mortgage with bad credit is our speciality.

Content on whether it is possible to get a mortgage with bad credit.

What is a credit score or credit rating?

It’s a score that is calculated by using the public record of your credit history. This record is called the credit report. A credit report contains information such as loans you’ve taken out and any payment defaults against your name.

Sorted.org nicely sums up a default payment as “a payment that has been overdue for more than 30 days, and that the lender has taken steps to recover the outstanding amount.”

A payment default could be something important, such as failing to make a loan repayment. It could also refer to failing to pay a phone bill on time. Both instances would negatively impact your credit score.

A credit score is made up of a number of factors, including:

  • Payment defaults
  • Mortgage arrears
  • Income tax debts or defaults
  • Outstanding or late fine payments,
  • Bankruptcy
  • Court write-offs and
  • Credit inquiries.

The number of loans you have and their amounts can also affect the score. Hire-purchase agreements and car loans, for example, will negatively affect credit scoring.

If you’d like more information on credit records and credit scores, we recommend the sorted.org information page. It details how to can check your credit report and manage any issues.

Why does my credit score matter when applying for a loan?

If you have managed to sort out our current finances and are ready to take on the responsibilities of a mortgage, getting declined due to a past situation will be really frustrating. It can help to remember that mortgages involve large amounts of money, so carry significant risk to the lender and the borrower.

The lender has a legal obligation to ensure they are lending responsibly. This is enforced by the Credit Contracts and Consumer Finance Act (CCCFA).

How can I get a mortgage if I have bad credit?

A bad credit score means a loan from a major bank is unlikely. However there are plenty of other non-bank lenders available. Non-bank lenders specialise in working with people who couldn’t get a loan with a bank.  They can offset the risk of lending to someone with bad credit by charging a slightly higher interest rate than the banks.

The key to successfully getting a home loan when you have bad credit is to use a mortgage specialist, such as Platinum Mortgages. As well as the major banks, we deal with many great non-bank lenders.

We handle most of the paperwork and can pull together an application that gives you the best chance of being approved. So if you’ve had your mortgage application rejected by a bank due to your credit score, don’t worry, we can help. Platinum Mortgages New Zealand Limited specialise in helping you when others can’t.

Once you’ve got your home loan, the goal is to up your credit score within the next couple of years. We can then help you move your mortgage to a bank with lower interest rates. Improve your credit score by paying bills on time, and simplifying debt where possible.

If at the end of the day your finances are holding you back from getting a home loan right now, we can help you get there. We can facilitate the consolidation of your debt to help you manage your debt, clean up your credit report and boost your credit score.

Check out our page on bad debts for more information on your home loan options. Or skip to the next step and contact us to start the conversation on how we can help you in your specific circumstances.

Self Employed Mortgage

How to get a mortgage if self-employed for less than 2 years

Is getting a mortgage if self-employed for less than 2 years possible? Yes! Getting a mortgage within the first two years of being self-employed can be a challenge, but possible. However, if you recently took the leap and become self-employed, congratulations! Fortune favours the brave. There are many benefits that come with being your own boss, as well as some challenges.

Suddenly, getting approval for your holiday leave is very easy (although finding the time may be harder). But getting a mortgage within the first two years of being self-employed can be a challenge. That’s where having a good mortgage broker can make buying a home both possible and much easier.

In this article we’ll take you through how you can get into your own home without giving up being your own boss. That’s where having a good mortgage broker can make buying a home both possible and much easier.

Do banks approve loans when recently self employed?

Generally speaking, the banks require you to be self employed for more than two years. If you are self-employed, the banks will require:

  • Two full years of accountant financials;
  • Two years of IRD Tax Summaries.

The exception is when you’re not relying on your self-employed income to pay your mortgage. Of course that doesn’t apply to many people. But don’t worry, there are other options! Otherwise, this would be a rather short article.

Self Employed Mortgage

If the banks say no, how do I get a mortgage?

This is where non-bank lenders (otherwise known as second-tier lenders) really show their worth. They can provide home loans to people who have been trading for as little as six months.

Platinum Mortgages deals with non-bank lenders who provide a genuine ‘low doc’ mortgage for our self-employed clients. This means less documentation is required to support your application compared to a bank. This reduces both time and stress on your part. Even better, no financials are required.

As a bonus, applications are processed promptly by our non-bank lenders. That’s no small thing these days, when the banks are often taking a long time to approve applications. Delays can cause a lot of stress for a client when they have put in an offer subject to finance. This is especially true when the property is nearing its deadline date.

Our non-bank lenders have a great track record in facilitating an easy finance process. We love seeing the benefits this has for our clients’ home-buying experience.

What do I need to get a home loan approved?

Recently self-employed can get a home loan approved, and here is how. At a minimum you need:

  • A trading period of 6 months
  • Your declared income must be within industry norms
  • Maximum 80% loan to value, subject to property type and location. This means the lender will need to approve the property you want to buy, just as a bank would.

Why can a non-bank lender give me a home loan when a bank can’t?

The non-bank lenders approve higher risk applications because they balance the risk out by charging a higher interest rate. This can sound a bit scary for clients. However, it’s a matter of calculating whether the cost is manageable and reasonable to get you into your own home. We help you understand how interest rates impact your mortgage payments. This way, you can factor it into your budget.

Non-bank lenders are a great as they to enable you to buy a home while you set up your business. After the two-year period is up, that’s the time we can help you move to a bank home loan with lower interest rates if your income and accounts are in order.

As to whether it’s worth paying a higher interest rate now or waiting to have been self-employed for two years to buy a home, no one can answer that for you. What we can say is, historically it’s how long you’re in the market that’s important, not when you buy your property. Meaning, it’s the amount of time you own property, rather than the timing of when you buy property, that gives the payoff on investment for most people.

How do I prepare for a loan at a bank after the two years?

The key thing is to have tidy and accurate financials for the two-year period, prepared by an accountant.

Warning: Don’t get tripped up by your tax returns

Being self-employed, you’re no doubt aware that how you treat your income and expenses determines how much tax you pay. Your accountant will most likely try to present your financial accounts in a way that reduces your tax bill. Ultimately, this means they will (where possible) reduce the income side of the balance sheet by increasing the expense side.

Unfortunately, this is usually the opposite of what you need to show to get a mortgage from a bank! You want your documented income to be as high as possible to prove that you can pay your mortgage.

This also means that any “cash jobs” (which we’re sure you never do) don’t get counted as income and detract from your ability to get a mortgage with a bank.

Platinum Mortgages is experienced in reading financial accounts and have skills in extracting several items within them that can be added-back into the income side. So, we can help you ensure that your accounts are in a good state to get you a mortgage at a bank once you’ve been employed more than two years. We’d love to talk with you about your plans and how we can help you buy your own home.

Bankrupt?

Can I get a mortgage after being discharged from bankruptcy?

We have good news because yes, it is possible to get a mortgage after being discharged from bankruptcy. While it comes with challenges to be worked through, you’ve come to the right place – challenging applications are our specialty.

How long do I have to wait after being discharged from bankruptcy before I can apply for a mortgage?

Most mainstream lenders (such as the main banks) will require you to have been discharged from bankruptcy for 5 – 7 years. Some non-bank lenders don’t require nearly as long, we have lenders that are able to provide a home loan the day after someone has been discharged.

How do I improve the chances of my mortgage application being approved after being discharged from bankruptcy?

We can’t stress enough how important it is to use a mortgage broker. You may think this is a self-serving view, given what we do! But we promise it is true. Mortgage brokers provide two key services for those applying for a loan post-bankruptcy:

Identifying your mortgage options

How to get a mortgage after being discharged from bankruptcy

Every bankruptcy situation is different. This means that the mortgage options that will be available to each person are different. Being an ex-bankrupt does make it harder to get a mortgage. You will have a limited choice of lenders prepared to offer you finance. That’s why it’s so important to have a mortgage broker who can identify which avenues will be open to you, and help you navigate them.

This is where we shine; Platinum Mortgages specialises in getting loans for people experiencing problems in getting a mortgage. We love a challenge! We take the time to fully understand your situation and then identify which lending options would be viable.

A minimum 20% deposit is usually required for ex-bankruptcy loans, whether the loan is with a bank or a non-bank lender. However, there may be circumstances where a loan can be approved with a lower deposit. It all comes down to the risk calculations run by the lenders. We can identify whether a lower deposit loan is feasible for you if necessary, and if not, we can help you plan your next steps to grow your deposit.

Putting your best foot forward when applying for a mortgage after being discharged from bankruptcy.

As an ex-bankrupt it is vital to put your best foot forward when applying for a loan. This is where having a post-bankruptcy mortgage broker specialist such as Platinum Mortgages makes a big difference. We understand the challenges and pitfalls you will come up against and can help you navigate around them. Having taken the time to understand your situation, we would then build your case, mitigating any issues where possible. This ensures you have the best chance of getting approved for a loan first time around.

Take your first steps post-bankruptcy

The most important thing of all is to just take some first steps. You don’t need to carry the impact of bankruptcy with you forever. We love helping people who have been through the pain of bankruptcy get back up on their feet again. Get in touch with us today to start the conversation about how we can help you realise your home ownership goals.

Can I Still Get a Mortgage If I Have Debt?

In a word – yes! This article will give you an understanding of how the banks take debt into consideration when reviewing a mortgage application, as well as information on the other lending avenues out there. The best option for you depends entirely on your personal circumstances. Contact us for a free consultation. We will give you advice and support specific to your situation.

How do the banks view debt when considering a mortgage application?

When reviewing a mortgage application, the banks look at three things relating to debt:

  • Current debt
  • Liability
  • Credit score

Current debt

First, they will deduct any loan payments when calculating your income. Let’s say you have an income of $50,000 per annum after tax. You also have loan repayments totalling $10,000 per annum. The bank will reduce your calculated income to $40,000. Sometimes, if the loan amounts and types show a pattern of ‘reckless’ spending, the bank may consider whether the applicant is going to responsibly manage the financial obligations of a mortgage

Does the bank care about big student loans?

When it comes to student debt, the banks aren’t usually concerned by the amount. This is because the loan repayments are always based on the person’s income, not how much is owed. And student debt is considered ‘good’ in that it likely has improved the person’s earning prospects in the long run. Given that some professions require students to go into debt in the hundreds of thousands, this is a big relief for many prospective homeowners!

Does the bank care about loans that are nearly paid off?

It’s important to be aware that the bank doesn’t look at when the term of a loan is up. If you’re a couple of months away from paying off your car loan at the time of applying, the bank won’t take that into account. Instead, they’ll calculate your income as if you are making those loan payments for the foreseeable future. For this reason, it can sometimes be a good strategic move to pay off a debt sooner. That would mean however that you’re likely to reduce your deposit, so it’s a bit of a balancing act. We can help you decide what the best move is for you.

Liability

Liability refers to any credit card or overdraft limits. When it comes to credit cards and overdrafts, the bank doesn’t look at how much you currently owe. Instead, they will calculate your debt using the assumption that you will spend up to your credit card and overdraft limits. So, a great first step to getting your finances in order is always to reduce your limits down as much as possible. This will increase your “income” as the bank sees it.

Credit score

Finally, they will look at your credit score. This will reflect any “bad debt” you may have. Generally speaking, bad debt means late or missed payments for loans and bills, tax debts and defaults and bankruptcy. You may not be aware that credit inquiries also reduce your credit score. Every time you apply for a hire purchase scheme or credit card etc your credit gets checked, impacting your score.

Can I Still Get a Mortgage If I Have Debt

What are my options when my mortgage application is declined by the banks?

It can be really disheartening if you get your mortgage application declined due to bad credit. You may have tidied up your finances and be in a secure financial position but due to your credit history the bank won’t lend to you. This is where non-bank lenders are a great option. We’re not talking about those shady finance companies that charge 8% interest per week and encourage you to go into debt for a holiday or a flash car. Non-bank mortgage lenders fill an important space. They provide loans to people who can afford a mortgage but aren’t able to get a loan with a bank.

Why can non-bank lenders give me a mortgage when the banks won’t?

They can approve mortgage applications that the banks have deemed too risky. To enable them to take risks, they charge a higher interest rate than the banks. This isn’t something to fear, you just need to factor the cost into your budget. It’s the price to get you into the property market now and secure a big asset for your future. They’re a great short-term solution to get into your own home. The key thing is to go in with a plan to get your finances tidied up to the point you can go to a bank within a couple of years.

We love supporting clients into their first home through a non-bank lender – and then helping them into a mortgage with a bank a year or so later. Once our clients have a mortgage with a bank (and therefore lower interest rates) we encourage them to continue to make the same payments as when they were paying more interest. This means their mortgage gets paid down faster and saves them huge money in the long run than if they’d just been making the minimum payments.

So there you have it, you can get a mortgage with debt or bad credit

Don’t assume a mortgage isn’t possible for you in your current circumstances. The key thing is to get expert advice to understand your options and maximise your chance of your application being approved. Platinum Mortgages specialises in solutions for people who have been declined by the banks. If there is a way, we will find it for you. We’re here for you for the long term, from helping you put a plan in place to get a mortgage, managing the loan process for you, getting you the best mortgage and mortgage structure, and managing your mortgages throughout your lifetime. We love seeing our client’s financial situations improve with our help, securing their future and a place to call their own.

How Bridging Finance Works

Bridging Finance is what you need when you want to buy a new home, without first selling your existing property.

Bridging Finance may be exactly what you need to:

  • Purchase the home of your dreams
  • Increase the size of your property portfolio
  • Upside or downsize your existing property
  • Aquire a new property before selling your existing property

What is Bridging Finance?

Bridging finance, or a bridging loan, is a short-term home loan. It aims to provide homeowners with a loan to purchase a new property before you sell your existing one.

Closed and open bridging finance are the two main types of bridging finance accessible.

Closed bridging finance typically involves a bank. This is when the sales on both your new home and current home are unconditional, and all you need is to bridge the gap between the two settlement dates.

Closed bridging finance usually has a maximum term of 12 months.

Open bridging finance usually involves second-tier or non-bank lenders. You may consider using this home loan option, when you are wanting to purchase another property without first having sold your current home.

The Pros and Cons

Bridging finance can be a complicated affair. Therefore, if you are considering taking out a bridging loan, we strongly advise that you consider both the benefits and disadvantages of this method of financing.

The Pros

Knowing that you have financial support to tide you over, will help you search for a new home with confidence, even if you haven’t sold your existing property. It would also allow you to purchase your new dream home without selling your existing one first.

You may have the option to pay only interest on your bridging loan, or even to capitalise the interest completely. This can make it much easier to manage your repayments. Again, we can advise you of the advantages and disadvantages of both.

You could use any money left over from the sale of your current property to pay off your bridging loan. This allows you to pay off your bridging loan faster and with less interest.

The Cons

Your current home may not sell right away, leaving you paying interest for longer.

Your existing property may also sell for less than expected, leaving you with more debt than you may have initially planned for.

Need Bridging Loan Solutions? Platinum Mortgages Can Help

Here at Platinum Mortgages, we offer an extensive range of bridging loan options for borrowers New Zealand-wide.

We can provide you with the solutions for both open and closed bridging loans. This will give you the confidence to purchase your next property, while waiting to release profits from a previous venture.

Because no two people are in the same financial situation, we ensure that our lenders’ bridging loans are tailored to your specific needs. They’ll offer you quick, hassle-free finance at competitive interest rates, perfect for the loan term required.

Our Bridging Loan Options

Option 1: Main Bank Bridging Loans

Through major banks, we arrange closed-ended bridging finance. We propose this as a first port of call because interest rates are typically lower and there is less risk.

Under this option, we can help you approach a main bank once your property has sold and you have a settlement date locked in on your existing home.

Both homes will be secured, and you will have to service both mortgages at the same time.

Our main bank bridging loans are subject to servicing and affordability.

How Bridging Finance Works

Option 2: Second Tier or Non-Bank Lender Bridging Loans

We also offer open-ended bridging finance options.

You would choose this option if you have no settlement date yet on your existing home and intend to sell it in the next 6-12 months.

We assist you by approaching non-bank or second-tier lenders. They will enable you to purchase a new property, while your old mortgage is transferred from your current lender.

Security will be taken over both properties. Unlike Option 1, a lender fee as well as a broker fee will be added to your loan, though this can be negotiated. You’ll be charged with higher interest rates, because the lender is taking on greater risk.

There are options to service both mortgages at the same time, make interest-only repayments, or capitalise the interest entirely with a big balloon payment once your existing property sells.

However, keep in mind that if you opt to capitalise the interest, it will continue to be compounded weekly or monthly, potentially resulting in you paying more interest in the long run.

Gaps in cash flow are a natural part of life. If you are on the hunt for a bridging loan to help you settle on that dream property before you’re ready to sell your existing one, Platinum Mortgages can help.

To learn more about our bridging loan options or schedule a consultation with us, please get in touch with our team of professional, qualified Mortgage Brokers / Financial Advisers at [email protected] or 0800 LENDING (0800 536 346).

What Is The Smartest Way To Consolidate Debt?

Do you want to consolidate debt and do so smartly? Most people have some form of debt, whether that be from credit cards, bank loans, home loans, or more. So, if you’re worried about your debt piling up, debt consolidation can be a good option.

However, if this is unfamiliar territory, you may be confused about how to get the process started. Don’t worry, when you work with a Mortgage Adviser / Mortgage Broker, the process becomes much more manageable.

What Is Debt Consolidation?

When you choose to consolidate your debt, you combine multiple individual loans into a single loan. By doing this, instead of paying off many different debts with varying interest rates, you can focus on paying off one loan with a set interest rate.

The resulting single obligation usually has a lower interest rate than the many prior debts. This means you’ll wind up paying back less money than you would have paid otherwise. Basically, by consolidating your debt, you save money and make things simpler.

When you choose to consolidate your debt, you will end up with a lower interest rate, reduced monthly payments, improved credit score and more. This is why it’s crucial to get an expert’s opinion and make the right decisions, so you can maximise your benefits and save money.

What Is The Best Way To Consolidate Debt?

What Is The Best Way To Consolidate Debt?

There are several different ways to consolidate your debt. However, the best option for you will depend on your situation. If you want to figure out the best strategy to deal with debt consolidation, speak with a knowledgeable Mortgage Adviser / Mortgage Broker.

Why Should I Work With A Mortgage Adviser / Mortgage Broker?

When you work with a Mortgage Adviser / Mortgage Broker, you work with an expert who knows precisely what they are doing. They will seek out the best lenders for your situation, walk you through the complicated process, and find you the best deal for your specific situation.

Platinum Mortgages’ skilled team of Mortgage Advisers / Mortgage Brokers are well-equiped to scrutinse every aspect of your financial situation. They make certain that the process goes down without a hitch.

If you want to save time, spend less money, deal with less stress and end up with the best deal available to you, you should work with a Mortgage Adviser / Mortgage Broker.

What Is The Smartest Debt Consolidation Option?

Overall, talking to a competent Mortgage Adviser / Mortgage Broker and getting an expert’s opinion, customised to your unique needs, is the smartest method to combine debt. At Platinum mortgages, we are here to help. Before you choose an option, talk to one of our specialists to figure out which choice is best for you.

Ready To Consolidate Your Debt?

At Platinum Mortgages, we assist New Zealanders to consolidate debt and find more affordable repayment options for their loans. So, if you want to know more about consolidation of debt, find out if it’s the right move for you. Alternatively, if you are ready to start now, contact us at 0800 536 346 for further information.

Don’t let your debt build up until you can no longer handle it; speak to us today and let us help you!

What Is Debt Consolidation And Why Is It Helpful?

Making your life easier through debt consolidation is the surest and easiest way to become debt-free faster. Moreover, combining multiple accounts into a single account simplifies management and saves time and money.

Debt Consolidation

Debt Consolidation is the process of combining previous debts with many lenders into a single loan. The result is one payment instead of many. This is helpful to manage multiple existing debts, because you make one payment at one rate. Furthermore it helps you to secure better credit by using a single lending company. In addition, this also gives you the flexibility to negotiate repayment terms and interest rates. Consequently it could often save you money in the long run, as you can avoid multiple high-interest accounts and payment dates. 

Consolidating debt is often a smart way to keep your credit line stable and get rid of various debt streams. When you combine your finances into an existing mortgage, you are effectively elevating yourself from high-interest loans that can negatively impact your credit rating. 

What Can I Consolidate?

The first question people ask is, what loans and debts can I consolidate? Although the answer varies depending on the lender, most reputable Financial Advisers can readily transfer your debts from:

  • Credit cards.
  • Debts on store credit cards.
  • Hire purchase loans.
  • Personal loans from finance companies and banks.
  • Student loans.
  • Tax arrears.
  • IRD payments.

While these are your traditional forms of debt, many companies also include medical debts and most payday loans. All you need to do is ask. If you are struggling with making multiple payments to several agencies, consolidating your finances will help you stay on top. With just one simple payment to make, you can effectively create a new budgeting plan that is designed to work for you.  

The Benefits

If you’re suffocating in high-interest loans and credit card repayments, debt consolidation could be the answer to reaching your financial independence. 

With competitive interest rates and a single payment system you can keep up with, consolidation is easily the best solution for your financial woes. Attaining a single loan doesn’t just improve your credit score, it will effectively:

  • Provide you with a lower interest rate that is spread over a more achievable length of time.
  • Make budgeting easier with only one payment to manage.
  • Provide you with lower monthly payments.
  • Allow for possible tax deductions.
  • Allow the equity of your home to lower your interest rates. 

Where Do I Consolidate My Debt?

Even if the banks say no, there are still an array of options available to best suit your needs. It is however important that you thoroughly think about your long term financial plans and how quickly you want to be out of debt.

The best way to figure out where you can consolidate your debt is by working with a reputable financial agency. An experienced Financial Adviser will explore the variety of consolidation channels available to you and present you with the best options to suit your needs. Professional Advisers can secure you a competitive interest rate. They also help you avoid unnecessary costs such as fees for transferring your funds from credit cards and hire purchases. Enlisting in the expertise of a professional Financial Adviser will ensure you are provided with accurate figures and up-to-date advice, greatly benefiting the flexibility of interest rates and your repayment options.

We Are Here To Help

The team at Platinum Mortgages can offer you a complete debt consolidation solution. With leading market rates on all debts transferred and comprehensive consolidation services, our team of professional Financial Advisers can help you combine your outstanding debts into one easy to manage loan. Get in touch today so we can provide you with the right advice for managing your outstanding finances.

4 Non Bank Lender Advantages Over Mainstream Banks

Are you planning to buy your first home or a new investment property and wondering if there are alternatives or advantages to mainstream banks, such as non bank lenders? You might assume that your only option for a home loan is to go to a bank. Non-bank lenders can be a more viable alternative than you might think.

Non-bank lenders have increased competition in the mortgage industry. They have given homebuyers more options when it comes to getting the right loan for your needs.

4 Advantages of Getting a Home Loan From Non-Bank Lenders

What Is A Non-Bank Lender?

The term ‘non-bank lending’ refers to any lender who provides finance but isn’t a traditional, registered bank such as ANZ, ASB, BNZ and many more.

The Benefits of Getting a Home Loan From a Non-Bank Lender

Many non-bank lenders are well-established institutions. Non-bank lending can even offer you advantages over taking out a home loan through a bank. These benefits include:

Start-Up And Business Friendly

Banks often refer business owners to a specific business banking department. Their role is to understand your company and provide you with the lending you require. However many of these business bankers often end up being more a hindrance than a help.

It’s not uncommon for bankers to ask for business financials, budgets, projections and plans. This information is not always available to you as the client, when you need it. Platinum Mortgages can help you draw up a suitable plan, to get approved for the loan you need for your business.

More Flexible Criteria

If your credit is poor you know that you would most likely be rejected for a home loan by a bank. This is when non-bank lending may be a great alternative. Non-bank home loans usually have less restrictive financial criteria for potential borrowers. This also makes them useful if you cannot immediately demonstrate to a bank that you have the income level they demand.

If you have a default on your credit report, a bank will often dismiss you as a bad credit risk and decline your application outright. However, an experienced non-bank broker will take the time to understand your problem. They will present a plan to your lender to get your loan approved.

Lower Deposits

Banks usually require a deposit of 20% on a home loan. As house prices in New Zealand continue to rise, the deposit requirements rise as well. Consequently, getting onto the property ladder can seem like an impossible dream. This applies to most people, whether you , first-time home buyers, new immigrants, or anyone who has suffered a recent loss in equity.

However, the competition between banks and non-bank lenders and the greater flexibility offered by non-bank lending, means that they usually have lower deposit requirements than banks.

As a result, non-bank lenders have made home loans far more accessible for first-time buyers and others who may be turned away from traditional bank loans.

Non-Bank Lender

Specialist Knowledge

Because they’re subject to less regulation than a bank, non-bank lenders can offer more personalised customer service. Many focus on a niche product rather than a range of different services as well. This focus means that they often have specialist knowledge about a particular area, like the housing market.

Choosing non-bank lending for your home loan means that your Mortgage Adviser can often guide you through a more comprehensive array of options than you might get at a bank. Their expertise can help connect you with the best mortgage for your unique situation.

Buying a home can be one of the most significant investments you ever make. A Mortgage Broker from Platinum Mortgages, can give you expert advice on non-bank lending and help you find the best home loan for your needs. Get in touch with us at 0800 536 346.

Is It a Good Time to Refinance When Interest Rates Are Low

With interest rates at all-time lows, you might have heard about taking advantage of this time as an opportunity to refinance your mortgage. This can be a good decision, although there are many factors you need to consider before doing so.

In this article, we’ll examine why it’s worth considering refinancing your mortgage when interest rates are low. We will also look at the pros and cons this could involve.

What Is Refinancing?

Why You Should Refinance When Interest Rates Are Low

Refinancing refers to the process of transferring or swtiching a home loan from one bank to another.

Here are several of the advantages refinancing a loan can offer you:

  • Take advantage of another bank’s products, services, or cashback offers
  • Secure terms when interest rates are at all-time lows
  • Increase your short-term cash flow
  • Build up an emergency fund
  • Borrow money for renovations or investments
  • Cash out your equity for vacations, weddings, or asset purchases
  • Avoid putting all your eggs in one basket
  • Switch from a non-bank lender to a mainstream bank
  • Switch away from a bank offering a poor service

A common reason for refinancing a loan is to lock in a new mortgage at lower, more advantageous interest rates. This can reduce the total amount you repay over time.

You can also reduce the interest you face using debt consolidation. Cashing out the equity in your mortgage when interest rates are at all-time lows can allow you to repay short-term personal loans and credit cards, which often have very high interest rates.

If you can afford your current monthly payments, you could benefit from refinancing to a shorter term when interest rates drop. Your interest will have less time to accrue, which means that you will pay less for your loan over its lifespan.

Another reason to refinance a loan, is if you had bad credit and your credit rating has improved over time. You could end up with more preferable terms. This could end up saving you money in the long run, especially if you do refinance when interest rates are at all-time lows.

However, just because interest rates are at record lows, it does not mean that you should automatically look at refinancing your mortgage. There are also costs and risks to consider before making such a significant financial decision.

The Costs Of Refinancing A Mortgage

The Costs Of Refinancing A Mortgage

Legal fees, early termination fees on a current loan, and new house valuation fees – these are just some of the financial costs you can run into when you choose to refinance a mortgage.

All these various fees mean that if you switch your mortgage for an interest rate that is only slightly lower than what you are currently paying, even when interest rates are at all-time lows, you could actually end up paying more out of pocket in the long run.

So, if you’re considering refinancing your home loan, you must tally up all possible expenses to make sure that the benefits of switching really do outweigh the costs.

There are also situations where you aren’t likely to gain much from refinancing your mortgage. For instance, if you’re near the end of your mortgage term. You’re unlikely to see much benefit from refinancing your home loan in this case. This is because savings are usually accumulated over time.

As you can see, switching your home loan can be a big decision. That’s why, if you’re thinking about refinancing your mortgage. Perhaps the reason is because interest rates are at all-time lows, a Financial Advisor from Platinum Mortgages can help. Rates are changing and you wnat to make an informed decision. We can assist you with weighing up the pros and cons of making a switch, so you end up with the best loan for your needs.

To learn more, please contact us at 0800 LENDING today.