Answers To All Your Questions

MORTGAGE FAQ

WHEN SHOULD I REFINANCE?

The answer is easy now, we will assess your situation and provide you with expert advice on how to structure your home loan, reduce your payments and ultimately become debt-free faster. You could save thousands. Best of all, there’s no cost to you because we get paid by the banks.

HOW MUCH DO YOU NEED FOR YOUR DEPOSIT?

There’s no hard and fast answer. It depends on a range of things, such as your particular situation and the type of home you’re buying. While the Reserve Bank placed restrictions on the percentage of home loans banks can lend to people with less than 20% deposit, it’s important to remember that there are other options available to you to help get your deposit together.

With Trebla advisers you don’t need a 20% deposit to start the home loan process. In fact, you can get the ball rolling right now by making contact and we can give you an indicative indication, or by talking to one of our mortgage experts.

SHOULD I FIX OR FLOAT MY LENDING

Your personal circumstances are another thing to consider when deciding whether to fix or float. For example, if you are likely to want to sell your property in the short term, then a long term fixed rate won't be a good idea.

The trick when choosing how long to fix for is to predict where interest rates will be when your mortgage expires. Ideally, you want the rates to be lower at that point.

In the stable interest rate environment New Zealand has experienced over recent years, floating rates have been the most popular. But the 'flight to fixed', as banks call it, is increasing. Fixing your mortgage is tempting in times of rising interest rates, but there are other options that can be explored.

Splitting your mortgage between fixed and floating is one option. This gives you stability for a chunk of the debt, in knowing how much you are paying back each installment and some protection from interest rate increases. It also offers the flexibility to make some extra payments.

WHAT IS EQUITY?

Equity is the difference between a property’s value and the amount you owe on it. If you sold your property and repaid your mortgage, your equity would be the amount left over.

For example if you have a house worth $400,000 with a $100,000 mortgage, you have $300,000 of equity in the property.

GETTING HELP FROM FAMILY – GIFTING AND GUARANTEES

If you have family who would like to help you get into your first home, you may want to explore gifting or guarantee options. They can be effective if you’re able to meet the repayments on a home loan, but don’t have the deposit you’d normally require.

PORTABILITY OR BRIDGING MORTGAGE

This type of solution is for people looking to buy a new property who are in the following circumstances:
1. You have a mortgage and do not wish to pay it off but wish to simply change the house you are living in.
2. You have found a new house and have not sold your current property.
3. You would like to change your structure of your lending from joint to trust and/or company.
I’d be happy to discuss the details of your Mortgage and customize it in order to suit your specific needs and financial situation. Contact me to find out if you’re eligible, and whether this would be a good fit for your needs.

FLOATING OR VARIABLE MORTGAGE

It’s easy to get lost while navigating all the different types of mortgage loans available. The Fixed Rate Mortgage could be the right one for you, but it’s important that clients understand all implications before signing something they could later regret. Contact me now in order to discuss the benefits and disadvantages, and together we’ll decide whether this is the right mortgage for you.

WHAT LOAN PAYMENT OPTIONS DO I HAVE?

Table repayments are the most common option. Your repayments stay the same over the term of the loan.

Here’s how they work:The total amount of interest that must be paid over the term of the loan is added to the principal (the amount you borrow).
This amount is then divided into equal repayments over the term of the loan.
You pay more interest than principal at the start, so initially you’re not building up much equity (the amount you own) in your home. However the balance changes over time and later on you repay more principal than interest, and your equity builds up faster.

Interest only repayments are exactly as the name suggests - you only pay the interest with each repayment. The principal (the amount you borrow) must be repaid at the end of the loan term (you can choose a one to ten year loan term).

Here's how they work:With straight line repayments your repayments are larger at the start, but they reduce a little each time and you pay slightly less interest over the term of the loan.
Get in touch to learn more about what is right for you

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Lending, Insurance and policy criteria and terms and conditions apply. Content on this website is general in nature and is not a recommendation, opinion or guidance to any individuals in relation to acquiring or disposing of a financial product. Readers should not rely on this content and should always seek specific financial advice appropriate to their own individual circumstances.

Joanne Walker

Registered Financial  Adviser

Partner

Albany Office, Auckland

021 660 307

jo@trebla.nz

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