Questions & Answers

Welcome to my Questions & Answers page.

While one of my favourite pastimes is answering peoples questions, please be aware that the answers provided here are generalised and may not be applicable to your particular situation. As always I recommend you seek professional individual advice before making any financial decisions.

I am readily available to discuss your situation one-on-one no matter where you are in the country, so by all means contact me by phone; (027 2511 336) or via email.

Also, check out my Useful Links section for the contact details of other professionals that I can recommend.

Q Hi Brian, you arranged our finance for us five years ago and I remember you saying if we have any questions regarding real estate to ask, we are thinking of listing our home and buying another, yes we want you to arrange a small top up for us, but the question for now is, do we give the real estate company a sole agency or should we list the property with several agencies to attract more buyers?
A Hi Trish, good to hear from you, not sure about answering this one as agents bite, only joking, there are good and bad in any industry but do feel the question would be best answered in a blog on the home page, rather than limit the answer to a few lines in this section, will post my answer this week, 'Don’t Lock Out Buyers', catch up with you soon, Cheers B

Q What do you think of Kiwibank…
A Not much, the so called peoples bank were the first to cap lending at 80%, last year they promoted the two year fixed rate as a way to repay your mortgage sooner yet the general consciences was to fix for a shorter period of time, instead of mocking the Australian Banks they should follow their lead, Westpac only require a 10% deposit…

KiwiBank comments . . .
Kiwibank only requires 20% deposit on premium rates (at this stage only our one-year fixed). On all other rates we do consider loan applications with lesser deposits, secondly, we also think Kiwibank does have a price advantage that does attract customers.  You only have to look at the mortgage figures for the main banks over the last quarter. The main differential between the banks was surely price! – KiwiBank

A In reply, I am pleased that KiwiBank are looking outside the square like some of the other lenders. They like others should convey this to the public rather than allow the media to run rampant, as it is a general conception that 20% is now required, maybe they have, but it is good news so why would the media be interested, try harder guys. Price, we are going to have to agree to disagree on, most of the time it does appear that Kiwibank has a price advantage, but as I have only lost one deal to Kiwibank since their first door opened, I disagree that it is the main difference between banks like many obviously do, the reason I resigned from a bank to return to being an independent broker, is there is not one lender out there that could honestly say they have one shoe that will fit all, Kiwibank, if you do have that glass slipper, where do I send my CV.

Thank You guys for taking the time to contact me and hey, keep up the good work . . . your marketing . . . superb!

Q With interest rates reducing should I stay on a floating rate and for how long should I wait before fixing…
A How long is a piece of string? It depends on so many things, as I am unaware of your personal situation I will generalise, it depends on how a change in interest rates will impact on you, and the structure of your loan. For now I wouldn't be in any mad rush to fix for a longer period of time. In fact I think there may be a move away from long term fixed rates for a while yet. I am watching the markets closely to keep up-to-date though…

Q How can you bag KiwiBank when they have the lowest interest rate…
A Didn’t think I did bag them, what I said was fact, secondly, how do you know they have the lowest rate as most banks don’t advertise their bottom line. Personally I don’t think it is good business practice to do so, it is a general conception in business; base everything on price and you will price yourself out of business, banks are much like oil companies, no one really has a price advantage…

Q Do you think now is a good time to buy…
A Buy what? This is where NZ property commentators go wrong, although NZ is only a small place we have many defined areas with different characteristics. Just look at the two islands for example, or even Manukau, South and East, but generally speaking, this answer is on the mark - yes now is a very good time, as soon as you can afford to invest, invest. Actually it hasn’t been this good for buyers for a number of years and remember, that applies to sellers if they are buying on the same market, think about it…

Q How can you say you can offer the best deal when for example the BNZ don’t deal with mortgage brokers…
A Ask them how their 'unbeatable campaign' went a year or so ago. As mentioned before, banks are very competitive and don’t just base your decision on interest rates, or FlyBuy points, it should be about the bottom line, how much is it going to cost? And will the structure allow me to live the lifestyle I have chosen. The key is the smallest word, "I", it should be about you, not about who…

Q What are your views on a revolving credit facility…
A Revolving Credit can be the best thing since sliced bread if you are extremely budget conscious, and have a reasonable surplus to reduce the debt on a regular basis. It is a recipe for disaster if not. Don’t get caught up in the hype, this is something that needs to be talked about in detail. I have seen this type of facility destroy people and not just financially. Yet others have managed the save hundreds of thousands of dollars…
This question really highlights the need for individual professional advice from someone that has your interests at heart - I can't emphasise this point enough! Contact me if you don't know who to ask - wherever you are in the country.

As I mentioned above, I really enjoy answering people's questions about mortgages, property and real estate. 

If you have a question you would like me to answer, ask it via a comment below, or if you prefer, email me directly.

Here's to your success,
Brian Dalley NZMBA

Comments

[Jan Rijks]

Is it ethical or legal for a mortgage broker to own a property management company and use that same property management company to do a rental assessment to support a mortgage application like I have seen Raewyn Thomas do.
Can the lender then withdraw their funding approval if they found out this was the case as well.?

Jan

[Brian]

Hi Jan,

Thank you for your question.

In my view it is not ethical, but legal, I would think so. Not a position one should put themselves in. If it were to be proven that the appraisal was intended to mislead then maybe it could be deemed illegal, in saying that, there are usually disclaimers making it hard to prove as an appraisal is really just one person’s opinion.

If you read the small print the lender can withdraw their funding for many reasons, so Yes. In saying that most lenders request an independent rental appraisal therefore if they knowingly accepted an appraisal that wasn’t of an independent nature, I very much doubt they could withdraw an offer.

For more information on what weekly rent is being charged in the local area for similar houses check out the Department of Building and Housing website. http://www.dbh.govt.nz/market-rent

I hope this helps,
Brian Dalley
E: brian@propertyprofit.co.nz