Applying for our own mortgage was a nightmare!

Before they launched Mortgage Mates, Brent and Hannah had always wanted to own their own home. However, applying for their first mortgage was an absolute nightmare, even with Brent working at the Bank! It took multiple attempts but they finally purchased their first home in Christchurch in 2012 after missing out on several in Auckland. 

11 years later, they’ve owned 8 different properties, made offers on upwards of 60 properties and currently own two in Canterbury. Since 2014 they have helped 100’s of other hard working New Zealanders into their own home and investments. 

Read more to find out about their property buying journey and what led them to starting Mortgage Mates.

As a young couple Brent and Hannah had always dreamed of buying their first home. After years of playing cricket professionally, Brent had started a career in banking at the then National Bank. They figured it would be easy to get pre-approved and buy their first home. Wrong. After many iterations of their lending application and failing to get an offer accepted in a busy Auckland property market, they finally secured their first home in Christchurch in 2012 after moving back to be closer to family. 

They look back now and can’t believe the journey, they’ve since owned 8 homes and currently have two properties in Canterbury, including their lifestyle block outside of Rangiora. 

The goal had always been to eventually move onto some land and live semi rurally and in 2017 they achieved that dream. They’re glad that the hard and overwhelming start as first home buyers didn’t put them off. 

In fact, it was the catalyst for them to leave their jobs and start Mortgage Mates. Convinced that they could better help hardworking NZers like themselves into property by simplifying all the jargon and making the overwhelming process straightforward. 

Having lived in all different types of properties and bought and sold through all the different methods, they have hands-on experience and understanding of what it takes to enter the property market and build equity in it. 

Today the award winning team of four at Mortgage Mates are based at an office in Rangiora on Conway lane and help clients up and down the motu. 

Banking has changed dramatically since our parents' generation, no longer do you have a relationship with your bank manager, but we see our role as Mortgage Advisors as similar to this and pride ourselves on knowing all our clients' names and situations. 

Over the years we’ve seen a lot and missed out on some opportunities, we often kick ourselves, says Brent, for missing out on our first offer in Auckland, a tiny 1 bedroom unit that sold for $352,000 is worth close to a million dollars now, that would have been nice he jokes. But the couple understands that hindsight is not the way you buy or sell property. You can only do the best with the knowledge and situation you have now. 

It’s been a testing time, says Brent, for buyers at every level and the past three years have been a rollercoaster however now is a great time to be a buyer. There are more opportunities for buyers than previously have been available, making offers subject to the sale of an existing property, longer settlement periods etc, things that even a year ago would not have been an option. 

For first home buyers, there are still plenty of ways to get onto the property ladder. 

Making the most of the grants and your kiwisaver is a must and we are here to hold your hand as you navigate that process. Getting pre approved so you can confidently make an offer and know your purchasing power is our biggest piece of advice. We see a lot of couples open homing and then coming to us wanting to buy and sometimes it’s not that simple and straightforward. It really helps to get your ducks in a row first and go out into the market prepared and ready. 

We’re also here for our clients post settlement and for the lifetime of their loan. Whether that's to help upgrade your home, renovate, buy an investment property, we see ourselves as the bank manager of years gone by, a long term relationship that you can depend on. 

It's been particularly obvious over the last year as interest rates have started to rise, that there is huge value in having an advisor. We work with all our clients on rate refixing and always look to mitigate risk and prepare for economic situations like the one we are in currently. Loan structure plays a huge role in being able to weather higher rates and because we work on behalf of our clients we are always making sure that we are doing our best to insulate against risk and save money on repayments where we can.

It’s never been harder to obtain credit, says Brent, but having the right advisor on your side is a great place to start. 

Residential construction costs are starting to normalise

Homebuilding costs are continuing to rise, but at a moderate, manageable pace, according to the latest Cordell Construction Cost Index (CCCI)

Costs rose 0.6% over the June quarter, after also rising by 0.6% in the March quarter. That's a big improvement on the average quarterly increases of 2.5% recorded in 2022.

As a result, year-on-year price growth fell from 8.5% in the March quarter to 6.4% in the June quarter. While that's still above the decade average of 4.5%, it's well below the peak of 10.4% that was recorded in late 2022.

The CCCI measures the cost to build a single-storey, brick-and-tile home with three bedrooms and two bathrooms.

Homebuilding demand has fallen

CoreLogic Chief Property Economist Kelvin Davidson said New Zealand has experienced a decline in the number of homebuilding approvals, which has taken heat out of the market.

“Although we’re also seeing the actual volume of building work start to drop, the construction industry is still busy as it works through the pipeline of previously-approved consents,” he said.

“The widely-anticipated slowdown in consents has alleviated some pressure on the construction materials supply chain in recent months while also slightly reduced workloads for builders, which means that the growth in costs isn’t as intense as it was in 2022.”

Some materials costs have declined

Mr Davidson said timber prices had stabilised in 2023, and that some structural timber costs had actually declined.

Similarly, metal prices have remained steady or even – as in the case of structural steel – fallen.

But one thing that’s putting upward pressure on prices is the tightening of the H1 energy efficiency and insulation standards, which occurred on 1 May. Mr Davidson estimated this would add 3-5% to the cost of a standard build.

“It’s possible that the overall CCCI may well have slowed even further in [the June quarter], had it not been for the new roof, window, wall and underfloor insulation building code changes,” he said.

Many New Zealanders have faced challenges building a house over the past couple of years, because prices have been rising so fast and it’s been hard to find a builder. Now that construction costs are growing at a much slower pace and fewer people are looking to build, conditions have eased. If you’ve been holding off building your dream home, now might be a good time. Contact me if you’d like to chat about financing the project.

Buyers remain in control as market appears closer to the bottom

Property prices in New Zealand are still declining, but buyer activity is on the rise, according to Real Estate Institute of New Zealand (REINZ) data from June.

Over the year to June, New Zealand’s median house price fell 9.0%. However, it fell only 1.2% over the quarter, suggesting prices are falling at a decelerating rate.

A similar picture has been playing out for house prices in the country’s largest cities:

• Auckland = down 0.9% over the quarter, down 10.6% over the year.

• Christchurch = down 1.3% over the quarter, down 6.8% over the year.

• Wellington = down 0.3% over the quarter, down 10.5% over the year.

• Hamilton City = down 0.8% over the quarter, down 9.6% over the year.

• Tauranga = down 0.7% over the quarter, down 9.1% over the year.

• Lower Hutt City = up 0.3% over the quarter, down 13.6% over the year.

• Dunedin City = down 4.7% over the quarter, down 6.9% over the year.

• Palmerston North City = down 1.4% over the quarter, down 10.4% over the year.

• Napier City = down 3.6% over the quarter, down 11.5% over the year.

• Porirua City = down 1.1% over the quarter, down 10.7% over the year.

Sales rise, new listings fall

A total of 5,629 properties sold across New Zealand in June, which was 4.1% lower than the month before but 14.6% higher than the year before.

Historically, though, sales tend to fall between May and June. When those figures are seasonally adjusted, June sales exceeded expectations when compared to May, according to the REINZ.

While more properties are being sold, fewer homes are being listed for sale. The number of new listings in June was 15.5% lower than the month before and 21.2% lower than the year before. As a result, the total number of properties listed for sale in June fell 7.5% month-on-month and 6.1% year-on-year.

To add to the mix, the properties that were sold in June took a median of 49 days to find a buyer, which was unchanged on the month before and up four days from the year before.

Four key takeaways from all that data

1. The slowdown in price falls suggests the market is getting closer to the bottom.

2. The increase in sales volumes suggests some buyers are taking advantage of these falling prices.

3. The decrease in new listings suggests some homeowners are holding off selling their home until prices resume rising.

4. The increase in days to sell suggests conditions have shifted further in favour of buyers.

If history is any guide, property prices will, at some point, start rising again. In that case, now might be a good time to buy, while prices are lower and buyer competition is limited.

Do you want to take advantage of the current market to buy a house or investment property? If so, get in touch and I’ll be happy to compare home loans for you and manage your loan application.

RBNZ leaves rates on hold after 12 consecutive hikes

The Reserve Bank of New Zealand (RBNZ) has left the official cash rate (OCR) at 5.50%, following 12 consecutive hikes.

According to the RBNZ, “'the OCR will need to remain at a restrictive level for the foreseeable future, to ensure that consumer price inflation returns to the 1-3% annual target range, while supporting maximum sustainable employment”.

Despite the hold, rates are still high, as is inflation, leaving many homeowners looking for ways to save costs. One option is debt consolidation, although it may not be right for everyone.

Why consider debt consolidation?

Debt consolidation is where you roll multiple debts, such as personal loans, car loans and credit cards, into one account. This could help simplify your repayments as you would have one rather than several to make. It could also potentially save you money if the consolidated debt was charged a lower interest rate than when the debts were separate.

There are a number of ways you could consider consolidating debt. These include combining it into one personal loan or adding it to your home loan. 

Key considerations before consolidating debt

Debt consolidation can be very beneficial, however there are a number of factors to consider before doing so. The main questions to ask include:

• Are there any fees for paying off any of the debts early?

• Are there any application, legal or valuation fees?

• Are you comfortable with the security? If you rolled unsecured personal loans or credit cards into your home loan, your home would be used as security, meaning the lender could seize your home if you were unable to keep up with the repayments.

• Will the new debt have a longer loan term? This could mean paying more interest over time.

• Can debt consolidation impact your credit score? Your credit score may be impacted in the short-term if you apply for multiple loans. However, if you consolidate your debt and consistently make your repayments, your credit score may eventually improve.

Why see a mortgage adviser about consolidating debt?

As you can see, debt consolidation can be an effective way for some people to save money and make repayments simpler. However there are a number of considerations to ensure it is the right strategy for you. 

I can help you decide whether debt consolidation is right for you, by taking the time to understand your situation and goals, and crunching the numbers. If you decide to proceed, I have access to over 20 lenders to find one that suits your needs and offers a competitive rate.

$100k deposit compensation scheme becomes law

Consumers will have up to $100,000 of their deposits protected in the unlikely event of a bank failure, after parliament passed legislation designed to strengthen the financial system.

Under the Deposit Takers Bill, which has been approved by parliament, the Reserve Bank of New Zealand (RBNZ) will ensure consumers are “promptly compensated” for up to $100,000 if they’ve deposited their money with an authorised deposit-taking institution that fails.

This government guarantee is expected to begin in late 2024, as the RBNZ first has a lot of preparatory work to do.

Currently, only two of the 38 countries in the OECD (an organisation that primarily consists of developed countries) lack a deposit insurance scheme – New Zealand and Israel.

“The passing of this bill will allow for the introduction of depositor protection and close a long-standing gap in New Zealand’s financial safety net, bringing New Zealand in line with international best practices,” Finance Minister Grant Robertson said.

“This means eligible New Zealanders will be provided economic security if their bank or other deposit-taking institution fails, while helping protect the country’s financial system and wider economy. The $100,000 limit will fully protect around 93% of depositors.”

RBNZ will manage the scheme

To access the government guarantee, New Zealanders will have to deposit their money in authorised deposit-taking institutions. That includes banks, credit unions, building societies and certain retail deposit-taking finance companies.

The RBNZ will be responsible for managing the scheme and ensuring depositors are compensated if an eligible institution fails.

“Coverage for the scheme applies on a per depositor, per institution basis. In a compensation payout scenario, amounts held in joint accounts at a single institution will be split equally across account holders and count towards eligible deposits, up to the coverage limit for each depositor at that institution,” according to the RBNZ.

Arguments about Money

One of the most common sources of conflict in marriage is money, how to spend it, and how to save for things that really matter.

It doesn’t make sense when you think about it logically. Money is simple. Keeping a budget is something an 8-year-old can do.

For a marriage to be wealthy, a couple needs to have more money coming in than going out. It’s just addition and subtraction. Debt needs to be eliminated, and money needs to be saved and invested for the things we want. You know, toes in the sand with a drink in our hand.

If you and your partner follow this rule, you’ll have no financial issues for the rest of your lives. But it doesn’t feel that way, does it? It feels like we need a Master’s degree in Finance and Wealth Management.

But do we?

Dr. John Gottman wanted to find out, so he went to a group of 8-year-olds and asked them for money advice. He told them he works with moms and dads who are fighting about money, so they can stop fighting and love each other more. All the kids understood this.

He told them a story about a couple.

The husband’s story went like this: “I don’t want to save for tomorrow. I want to live for today. I want to spend money enjoying life. Uncle Jack saved up millions of dollars living in a one room condo and he never went out. He never truly enjoyed life. I don’t want that.”

The wife’s story went like this: “My family grew up poor. We never had any money when an emergency came up or if somebody got sick. We never had enough to plan for the future. When my parents got older and couldn’t work as hard, they had nothing. They couldn’t retire. I don’t want to be like my parents.”

One wants to spend now. The other wants to save for later. They are stuck in financial gridlock.

Dr. Gottman looked at the kids and asked, “What should this mom and dad do?”

A hand shot up. “Save some and spend some.” The other kids looked at each other and agreed.

The 8-year-old believed that the couple should work out a compromise with each other. The best option would be to work hard for a while, put some of the extra money in savings, and use the rest of it to enjoy life so they don’t end up like Uncle Jack.

That’s all it takes. Kids are totally logical.

So what’s wrong with us adults? Why do we struggle with money when an 8-year-old knows what’s best?

Money Isn’t About Money

Money, to a degree, defines us. It determines how we dress. How we eat. What social groups we join. Whether we like it or not, money influences what we can and cannot do with our lives. So where does all this start?

Out of all the forces that determine our relationship with money, the most influential is our personal history – the melting pot of our childhood, teenage, and adult experiences that have sculpted and re-sculpted our likes and dislikes about money throughout our lives.

Our unique experiences come together to form what Dr. Gottman calls our Money Map.

We spend our lives swimming in a sea of moments that sculpt our financial dreams and fears. Maybe it was your father’s gambling problem, or your mother’s uptight way of controlling the household finances. Maybe it was your sister’s expensive interest in riding horses. Maybe it was your wealthy uncle who had a nine car garage, leaving you to feel like you couldn’t measure up.

These, along with thousands of other moments, create our individual beliefs about money.

Money Maps, like Love Maps, are often subtle and difficult to read. You may have grown up with an alcoholic mother who spent food money on liquor, making your meals unpredictable, so you made a promise to yourself that high-quality, expensive food was more important than saving for retirement. Or maybe you were picked on by kids in school for the way you dressed, so you spent all of your savings on custom tailored suits and ate Mac and Cheese every night so you wouldn’t get made fun of.

It’s these personal meanings that guide how we deal with money in our marriage. Logic has very little to do with it.

So when your partner complains about the expensive organic groceries you bought at Whole Foods, or the silk tie that costs more than a plane ticket, an argument breaks out, to you it’s not just food or a tie. These privileges represent stability and success. They protect you. They define you.

Money is loaded with power and meaning that can make can discussions heated and hurtful. Arguments about money aren’t about money. They are about our dreams, our fears, and our inadequacies.

What 8-year-olds don’t understand is that the key to managing conflict about money is to not focus on how much something costs. Instead, it’s to go beneath the dollar value to explore what money really means to each person in the relationship.

To move past these arguments, you need to use conflict about finances to understand how your partner came to be that way. Work together with this new understanding of each other to create shared meaning around money that brings you closer, rather than pushes you apart.

Originally published by Kyle Benson.

https://www.gottman.com/author/kyle-benson/

Our Top 5 things to think about before the 31st of March

End Of Financial Year (EOFY) is just around the corner, so start reassessing where you are financially and where you want to be. Here’s five things you can do.

Bring your debts together and pay less
Consolidating debt involves simplifying many little debts into one loan. A single loan means less juggling; account fee savings; and likely, less interest overall. Leave it with me.

Think about those tax deductions
If you’re an investor, include any payments you’ve outlayed on your rental property for repairs or maintenance. You can also claim depreciation or wear and tear on certain items against your taxable income such as buildings.

Prepare for the unexpected
Insurance documents yellowing in a drawer somewhere? It’s time to pull them out and make sure you and your family have the right cover to pay your loan, if something unexpected was to happen (accident, job loss or death). We partner with Insurance Market who is an expert in this area and can help get you the cover you need.

Make sure your loan is working for you
Refinancing means moving from one loan to another and choosing a better way to pay off your loans. If you haven’t looked at your loan for a while, or your financial goals have changed recently, let me know. With access to over 20 lenders, I will look at what else is out there and find the right loan to suit your needs.

Get ahead on your mortgage repayments
If you want to get savvy with your loan, set up a transfer for an extra $25 per week on top of your loan payment to get ahead. You’ll be surprised how much it helps. On an average loan of $400,000 you could look at reducing the overall amount you pay over the life of a 30 year loan by $59,905!* Not bad!

If you have any questions about my tips, let me know. I’m always here to help.

*Calculations are based on a principle and interest loan of $400,000 at 6.00%p.a. rate for 30 years. It may not include all fees and charges and the impact of additional or increased payments.

Bank or Mortgage Advisor?

Bank or mortgage adviser? Who should help you with your loan?

Getting a competitive, hassle-free loan on your own isn’t easy, so do you go with your bank or a mortgage adviser?

According to Rod Severn, from the Professional Advisers Association, advisers arrange about 40% of mortgages. And Kiwi’s are happy with their service with a Consumer Magazine survey finding the majority of those who’d used an adviser in the past five years were very happy.

Advisers have the time and financial knowledge we wish we all had. And, because they’re paid by your lender, you’re never out of pocket. Here are a few other reasons why it’s good to chat to an adviser:

• you get a wider range of choices

• they drive competition between banks and lenders

• they bring you the help you need, when and where you need it

• they help you navigate the complex home loan process from application to settlement and everything in-between

Want to know more? Talk to us and we’ll sort you out. 

6 Tips to Help You Save

These 6 Tips apply to first time buyers and anyone wanting to buy additional property! 🏡🏡🏡

➡️ 1. Make a budget: jump online or talk to an Advisor (that's US) about what your affordability looks like in terms of loan size. Then assess your income vs expenses to figure out how much you need to save for the deposit.

➡️ 2. Stick to your aforementioned savings goal and budget! We found apps like PocketSmith super helpful when we were saving - https://www.pocketsmith.com/

➡️ 3. Sort your personal debts out. Banks are far more likely to loan you $100,000s of dollars if you have little to no short term consumer debt. If you have any debt with collections agencies pay this off first and ASAP. If you have other short term debt consider consolidating it into one loan (we can help you with this also) and make sure you are consistent with your payments to show the bank you can address and handle debt.

➡️ 4. See what help you can get - do you qualify for any grants? Kiwisaver withdrawals? Do you have parents who maybe able to gift you some funds? Or if you currently own a house do you have equity you can access?

➡️ 5. Start now! Best times to start saving was years ago or NOW!

➡️ 6. Look at non bank lenders who may have different criteria to your traditional banks.

➡️ Bonus tip - speak to an unbiased expert A.K.A a Mortgage Advisor 👋👋👋 

#MoreThanJustGreatRates

The Loan Process Explained - How an Advisor can help

How an Advisor Can Help

The role of a mortgage adviser is to make the home loan process as smooth as possible for someone wanting to buy a property. When wanting to secure finance, it’s hard to know where to start. An adviser can help guide you through the process and provide you with information and support to help you make the right decision when it comes to your loan.

A chat with your adviser

Here you’ll nut out your goals, your current financial position, and your borrowing power – to narrow down the kind of loans you’re after.

Understand what’s possible

Your adviser will present a few loan options to you. You choose one, then they get to work – preparing and submitting your loan application to your chosen lender.

Getting the go-ahead (pre-approval)

If all goes well, within a few days you’ll get the green light to borrow a set amount for a set time (usually valid for three months). This gives you a clear idea of what you can spend - and everything you need to make an offer on a property.

Finalising the loan (formal approval)

You’ve made an offer on the property and now it has been accepted. All that’s left is the paperwork which an adviser will assist you with. During this part of the process, your property will be accepted by the bank, the details of your valuation and insurance will be provided, and a settlement day will be scheduled.

Settlement - The big day

In this final stage, your adviser will coordinate the lead-up to settlement with your solicitor. Documents are signed to say you officially own the property and the funds from the bank or lender are transferred to the seller. Then you get the keys. Time to celebrate - the property is now yours!

After settlement

The role of an adviser doesn’t just stop there. Loan products and rates are changing all the time, so your adviser will be in touch at least once a year to make sure the loan that was originally set up for you is still competitive and is assisting you in achieving your financial goals.