The world of property and finance has been interesting over recent months with new rules designed to slow the property market having the desired effect in some ways, but causing total confusion as well. Kiwis have always been used to having an open market when it comes to borrowing money, and until very recently the banks have been in charge of making the rules which dictate who they are able to lend money to. Of course, banks are in the business of making money and therefore the tendency is to lend as much as possible with little regard to how this may fuel the housing market especially in periods when there is a lack of supply of housing too.
Lending Restrictions Introduced
In an effort to slow the housing market we saw The Reserve Bank in late 2014 step in and introduce rules to slow down the low deposit lending. This year they have extended those rules meaning the banks have a very limited ability to lend more than 80% for homeowners and no ability to lend more than 60% to investors – unless the lending is for a new build.
This latest round of tightening seems to have slowed the real estate market, but not the sale of new houses being sold off the plans. Areas like Hobsonville Point and the wider Hobsonville areas seem as busy as ever, and we are also seeing strong demand for lending continuing a little further away in Riverhead, Kumeu, Huapai and around Helensville.
New Build Finance Update
Having our offices based in Hobsonville (by Countdown) and having recently built our home in Hobsonville Point have contributed to a lot of enquiry for new build finance in the area.
While there have been new rules for mortgage lending, those rules do not apply to new build finance; however, the banks will apply their own criteria, and that differs a lot. It is also very interesting how little many bank staff know about their own rules when it comes to finance for a new home or investment property.
We have had a lot of enquiry from people who have approached their own bank and left confused or of the opinion that they do not fit the criteria.
Having been through the process ourselves and due to the number of loans we have arranged for new builds we have a good understanding of which banks will suit a specific situation, and more importantly we know how to structure the lending to ensure you get the lowest cost (best interest rates etc.) and to ensure it best suits the build contract you are working with. No doubt you would prefer to spend your time choosing a company to build with, reviewing plans and getting the design and features right. Leave the finance to a mortgage broker who can ensure that the finance works for you.
TSB Bank Is Now Open At NorthWest
It was great to see TSB Bank open another Auckland branch at the new North West shopping centre recently.
There are a few New Zealand owned banks now with Co-Operative Bank, Heartland Bank, Kiwibank, SBS Bank and TSB Bank so as mortgage brokers who use the Kiwi banks quite a lot we were pleased to see TSB opening a local branch. Of course with so much of the banking now done online it’s not as important as it used to be; however, it is nice to see a bank like TSB being committed to the area.
As mortgage brokers, we can source home loans with TSB Bank, and they are definitely one of the best when it comes to the interest rates we are able to offer.
– Stuart Wills