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What Is Debt Consolidation And Why Is It Helpful?

Making your life easier by consolidating your debt is the surest and easiest way to become debt-free faster. Combining your existing accounts into one easy to manage loan, will not only save you time but will save you money.

Debt Consolidation

Consolidation is combining your existing debts with various lenders and converting them into one singular loan, then paying the sum off as a whole. This is a helpful way to manage multiple existing debts, as it gives you the ability to pay off money owing with a single interest rate and to secure better credit by using a single lending company. Debt consolidation also gives you the flexibility to negotiate repayment terms and interest rates, often saving you money in the long run, as you can avoid multiple high-interest accounts and payment dates. 

Debt consolidation is a secure way to stabilise your credit line and to free yourself from the pressures of hire purchases and credit cards. When you combine your finances into an already existing mortgage (if you have one) 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? While this answer can differ from lender to lender, but most established Financial Advisers will be able to easily 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 is most likely your best chance of staying on top. With just one simple payment to make, you can effectively create a new budgeting scheme that is designed to work for you.  

The Benefits

If you’re suffocating in high-interest loans and credit card repayments, rolling your existing debts into one easy to manage loan 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 and will help you to 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 Advantages of Getting a Home Loan From Non-Bank Lenders

Whether you’re planning to buy your first home or a new investment property, you might assume that your only option for a home loan is to go to a bank. However, non-bank lending can be a more viable alternative than you might think.

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

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

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, whose 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 – information that’s 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 average or poor and you have or know that you would be rejected for a home loan by a bank, 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. An experienced non-bank broker, on the other hand, will take the time to understand your problem and 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, these deposit requirements mean that getting onto the property ladder can seem like an impossible dream for many young, first-time home buyers, new immigrants, and 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.

Why You Should 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, as well as 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 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 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.

For this reason, 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, as these 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 because interest rates are at all-time lows, a Financial Advisor from Platinum Mortgages can help. 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.

Real Estate Investment

How much deposit to buy a house in NZ?

Buying your dream home in New Zealand is simple. You select the house you want to buy, then put down a deposit as the down payment. Your lender covers the rest of the difference. That sounds easy, but you might ask how much deposit do you need to buy a house in NZ?

Before looking at properties, you need to save for a deposit. How much deposit you need, depends on whether you are buying the property as an investment property or you will be living in the property.

Generally, the mainstream banks’ requirement for a deposit to buy a home in New Zealand is either 20% for a pre-approval or 10% on an existing offer in place. And if you are an existing client at the bank, some banks will allow a 10% deposit for a pre-approval. The non-bank lenders, may only require a 10%-15% deposit.

Of course, many people do not have the 20% deposit they need for their dream home, and they come to Platinum Mortgages to seek advice on how they can achieve that goal. As the first step, Platinum Mortgages Advisers will need to understand how much deposit you have at hand, what purchase price you can get with your deposit and what is the purchase price of your desired house.

By looking at the gap between your deposit and house purchase price, we can provide the best mortgage option for you or help you work towards your savings goal. Even if you don’t have enough deposit for your dream home, we can look at alternative options or ways to help you achieve your goal.

If this is your first home, or you have previously owned a house, you have been contributing regularly to KiwiSaver, and you intend to live in the property, then you may only need a 5% deposit.

What the lenders need to know

Most lenders want a guarantee that you will be able to pay off your loan once the contract is signed and the house is yours. They do this by:

  • Looking at your income: your financial transactions, savings, credit lines, and how responsible you have been with previous rent or mortgage payments. 
  • How much deposit you currently have: your savings, gifting from parents or relatives, KiwiSaver, and First Home Grants.

Contact Platinum Mortgages to get a better understanding of what information you need to provide for your mortgage application. The team are here to steer you in the right direction, and they will be honest with feedback or suggestions.

Make sure you can afford your repayments

Especially for a first-time buyer, the most important thing to consider is whether you can afford your mortgage repayments (i.e. the amount you need to repay after deducting your deposit from the property purchase amount). As every lender will have different interest rates, use our Mortgage Repayment Calculator  to work out your monthly, fortnightly, or weekly mortgage repayments.

At Platinum Mortgages, the Financial Advisers will also work together with you to put a budget plan in place before you start looking for a property, so you can prove to the lender that you have sufficient income to repay your mortgage after deducting the expenses.

Taking the Final Decision

Talk to Platinum Mortgages and obtain expert advice before making any final decisions. They will provide you with the best advice for your particular situation. Considerations should include the deposit amount, mortgage term, interest rates, loan structures, affordability and sustainability, planning for a rainy day and exit plans etc.