The truth about mortgages, interest rates, the housing market and everything else the media likes to sensationalise!

by Aug 1, 2019Mortgages, Non-Bank Lending

 

‘House prices down’ ‘First home buyers finding it impossible’ ‘Investors exiting the market’

Such headlines are gross exaggerations and often blatant misrepresentations of the truth.

The Housing Market

This is flat, but stable.

QV (NZ’s leading provider of rating and valuation services) predict that while sales volumes will be negatively affected by house prices, it will be positively affected by low interest rates, so the net result will be no real change.

The annual total numbers of houses sold for 2019 is expected to be 85,000 to 90,000, which is in line with the average for the past decade.

So, is this is a media manufactured problem?

Prices

Some regions are still rising and others falling, but the changes are small.

Auckland has stabilised as both buyers and sellers are biding their time to get the right price.

No one is predicting any more falls, the ‘correction’ having already happened. Correction is the right word, as all that happened is the rise in prices stalled – they didn’t actually fall!

There simply aren’t any pressures for price falls. Low interest rates, too much equity at stake for some sellers and a desire to live in certain suburbs, will keep prices stable, not to mention high levels of net immigrants.

Interest Rates

Interest rates are low, incredibly low, and expected to stay this way for some time. Some commentators predict even lower to come, as the economy has slowed, but if it does, the drop will be tiny.

This should not be an influence when taking out a mortgage, as how you structure it is far more important than the nominal interest rate.

Property Investors

Property Investors went into a flap earlier this year with the possibility of Capital Gains Tax (CGT), the imposition of Healthy Homes insulation and the tax ring-fencing for losses, not to mention laws that tend to favour the tenant.

But that has all passed, with CGT a non-event, responsible landlords attending to insulation and most undertaking due diligence when finding good tenants.

The ‘Foreign Buyer Ban’ had its main impact on Central Auckland and Queenstown properties, but little anywhere else.

Rental Yields

Rental yields to continue to rise (albeit from a low base), as rental growth continues at about 5% annually.

It’s a market that is bouncing back.

Mortgage Lenders

This is the biggie!

Banks are being asked to fund additional capital, which according to QV, could impact on differing mortgage rates to borrowers, based on their ability to service debt.

At the same time the LVR (Loan to Value Ratio) may move from requiring a 20% deposit down to 15%.

However, banks are tightening up in several ways, but there are alternatives.

The Rise and Rise of the ‘Non-Bank’ Lender

‘Non- bank’ is a highly misunderstood term.

It defines any Lender who is not a mainstream Bank and there are many.

We often get the comment, “but are they safe”?

Our answer is, “well you have their money, so does it matter?”

Seriously, we are not that flippant, but they are becoming a very strong group in the lending market.

Their criteria for lending vary, but they don’t follow the strict rules of the banks.

This group of lenders is growing fast, as they will consider each application on its merits, so ask us more about them.

In Summary

Stop reading the doom and gloom in the press!

The market is fine, prices are stable, interest rates are amazingly low, property investment is most definitely a goer and there are a lot more options than the mainstream Banks to borrow from

For an impartial and free chat to see what we can do for you, please call us on:

0800 LENDER or email help@ilender.co.nz

or

APPLY NOW

About iLender

At iLender we put your best interests first and not the Bank – our advice is impartial as all Lenders who we do business with pay about the same in commissions.

Although we are Auckland based Mortgage Brokers, we help customers everywhere in New Zealand and overseas with buying property in New Zealand, as we are very much about online and giving advice here and now!

Government Housing policy changes – March 2021

Can they work or is there ‘an elephant in the room’? A lot of comment has been made around the Government’s changes to Residential Property Investment over the last few days, so I thought commentary from me, with nearly 30 years in Property Finance, might bring some...

What kind of loans can I get with bad credit?

A few financial slip-ups in the past can have a surprisingly big impact on your credit rating. A bad credit rating indicates that you may be a risky borrower, which can make it difficult to get the bank’s approval when the time comes to apply for a home loan....

LVR changes and what do they mean for you?

Background In 2013 the Reserve Bank introduced LVR restrictions to curb a potential overheating of the property market. As a rule, owner occupiers needed a 20% deposit and investors 40%, later reduced to 30%. There was some leeway with banks able to lend a very small...

Getting a home loan: What to do when the bank says “No”

It’s easy to feel discouraged when a bank rejects your home loan application, but it’s important that you do have other options when it comes to securing a mortgage. Non-bank lending can be an excellent option for home buyers who have had their mortgage applications...

Credit searches – What to know before you apply for a Mortgage or Loan

All Lenders use a credit search as part of their assessment of a Mortgage or Loan Application and there are some things that are important to know. Some Lenders use a credit scoring system, some don’t. Credit Scoring Mainstream lenders use a credit scoring system and...

More Reasons To Be Cheerful

Upturn in House Prices… A couple of the major Banks are predicting house prices to increase by up to 7 per cent next year with the property market due to "spring back to life". This is a welcomed announcement as it comes on the back of a fairly quiet winter - so signs...

Can I get a home loan with bad credit?

Getting a mortgage can be challenging if you have bad credit or no credit history. Banks tend to perceive you as more of a risk and are generally less inclined to approve your home loan application.  But that doesn’t mean it’s impossible to get a mortgage. Here at...

The truth about mortgages, interest rates, the housing market and everything else the media likes to sensationalise!

  'House prices down' 'First home buyers finding it impossible' 'Investors exiting the market' Such headlines are gross exaggerations and often blatant misrepresentations of the truth. The Housing Market This is flat, but stable. QV (NZ's leading provider of rating...

Is this a good time to buy?

Auckland mortgage brokers weigh in It’s no secret that the Auckland property market has slowed considerably in recent months. With sales volumes dropping, house prices showing little signs of growth and homes taking longer to sell, it’s little wonder that buyers are...

What is a non-bank mortgage and is it right for you?

When it comes to choosing a mortgage, it’s important to remember that you have other options besides getting a traditional home loan from the bank.  Non-bank mortgages have become increasingly popular in recent years as Kiwis look for alternative ways to get onto the...

Best mortgage rates, 10% deposit owner occupied and 20% rental purchase, self employed with no financials and help for those with bad credit or arrears.

Hundreds of reviews on TradeMe and Google makes us your ‘Number 1’ choice.

Call 0800 536 337