The Debate: Should You Buy Or Build Your Next Home?

This is a question many people will ask themselves and while there are advantages and disadvantages in both, there is never a clear answer that suits everyone.

At the end of the day we are all different.

Buying An Existing Home

The real benefit when buying an existing home is that it already exists.

If you find a suitable home at a price that you are happy with then with a pre-approved mortgage you can make an offer with the view to moving into your new home quite quickly. Often the whole process can be completed within a month, but that will depend on firstly finding the right house and then negotiating the price and terms of the sale.

Over recent months the hardest part was finding a house; however the market has cooled a little and people are finding there is more choice and therefore will be more time to make the decision and negotiate.

With an older house you need to consider what changes you might want to make and the maintence issues that might cost you a lot of money. There are the plaster houses that have been tagged “leaky houses” and with those you would need to take extra care and get a professional building inspector to check it thoroughly before committing to the purchase.

To Build Your Next Home

The decision to build your next home will be limited by your budget and finding a suitable section.

Your budget is always going to be important. One of the major problems people having with building a new home is the cost, and especially when you are building your dream home you will come across some great ideas and products that you may want to incorporate; however some of the really good ideas cost a considerable amount. You can make your bathroom or kitchen a design statement which may add value and appeal to your new home, but the cost in these areas can easily blow the budget too.

Think of the long-term cost including things like ongoing maintenance, but also remember that you are required to pay back the money you borrow and with a mortgage there is an interest cost too.

Finding a section that suits can be a frustrating search. The ‘perfect’ section may not exist within your budget and in areas like Auckland the prices people are paying for land is an ever-increasing amount.

A key point that I make to people is you can change a house later, but the land and aspect of the land cannot really be changed so select your section carefully.

Some people are put off building from some of the ‘nightmare stories’ that they may have heard; however there are many very positive stories too.

Finance Your New Build

Many people think getting the finance for their new build is going to be hard, but it is not as hard as it may seem.

As a mortgage broker that has both built our own home recently and financing a lot of new builds in Auckland I have a good knowledge of what the various banks can do. Some banks are quite easy to deal with and some are more difficult. While you may want to get the new build finance from your existing bank this might not be the best option for you – or it might be.

In many ways getting the finance to build a new home is easier than getting a regular home loan. The banks have differing credit policy which means selecting the right bank is important, but The Reserve Bank understand that we need more houses build and so the new build rules are not as strict.

To answer the question of should you buy or build your next home we would need to know more about you and your finances and what you really desire. I would love to have the discussion with you and share some of my own personal experiences which may help answer some of your questions.

Why New Build Houses Make Good Rent Investments

One of the more serious decisions you’ll need to make as a property investor is whether to invest in new build houses or existing houses.

As a New Zealand mortgage broker I hear all sorts of stories and hear about some older houses that have cost people a lot to maintain. For this reason building a new house is definitely something that you should consider and especially in places like Auckland where houses are going to cost more, but where house prices are rising too.

Of course there will be a lot of people with their own opinions, but in today's finance environment we think that new build houses may make better rental investments.

We explain why we say this and then you can make your own decision.

Your Tenant Prefers A New Home

In most cases, new build houses are built better and to higher standards of quality than homes built a few years ago.

They have better features such as ensuite bathrooms and heat pumps. Properties built today benefit from being more environmentally friendly. They have energy efficient windows, better insulation, and efficient heating systems which mean lower running costs for the people living there.

Most new build houses today will be built on smaller sections, but for a rental property that is typically quite good as it means less area to look after.

Having a house that is appeals to tenants means you should be able to find a tenant more easily, you will typically get a higher rent and the tenants should stay in the house for longer.

Lower Repair and Maintenance Costs

New build houses benefit from lower maintenance bills too and they should come with a builder guarantee. You shouldn't have an oven or hot water cylinder that suddenly packs up, and things like roofs will have many years before you need to replace them.

You will generally find that tenants will look after a new property better than an older one too.

New Build Houses Are Easier To Buy

With the recent changes to the LVR rules, a property investors now need a 40% deposit when buying an existing house in New Zealand with bank finance; however new build homes are exempt from those rules and therefore you do not need the same size deposit.

Some banks will allow you to buy a new house with a 20% deposit and some will even go as low as a 10% deposit.

As an investor you may be limited by the cash available to invest, and therefore being able to invest in more property for the same actual cash investment makes sense. If you had $200,000 to start a property investment plan, then applying a 40% deposit means you can buy a house worth $500,000 whereas if the deposit required was 20% then you are able to buy property worth $1,000,000.

This often means you can buy two properties rather than one, and this gives you the ability to spread your risk, gain from larger capital gains and gives you the ability to sell a property should you ever need to. We are new build finance specialists and can help you get your new investment property.  

Find A Mortgage Broker In New Zealand Or A Kiwi Mortgage Man

It is imperative these day if you want to get finance on a property in New Zealand to have a Kiwi mortgage man helping out.

By a Kiwi mortgage man we mean a New Zealand mortgage broker.

That is someone who can help you arrange finance when you want to buy property in New Zealand.

Why A New Zealand Mortgage Broker

I guess the real question should be "why not?" as Kiwi mortgage brokers tend to work for you for FREE as the banks pay them.

Often the banks give the impression n that mortgage brokers are molre expensive; however as a mortgage broker for almost 20-years now I find it very rare when a bank can get a better home loan interest rates than a mortgage broker - or at least a decent mortgage broker like me - Stuart Wills.

The key is to speak o a mortgage broker not a bank.

Why Mortgage Brokers Are Better

There are a number of reasons that a mortgage broker is better than a banker, but really it is as mindset.

Kiwi mortgage brokers are typically paid by the banks - but work for you.

Choose The Best New Zealand Home Loan

Today I had a lady visit the office to discuss how I could help her get the lowest home loan interest rates, but the conversation focused on how to choose the best home loan which is quite a different and more complex subject.

So often we see people that have are so focused on just getting a house that they forget about the importance of getting their biggest debt right, or people that pop into their bank to arrange a home loan in the shortest time without really considering the options – what the various other banks can offer. The thing is, we think that knowing how to choose the best home loan is the most important thing of all.

A home loan is a big debt, and a debt that you will be paying back for a very long time.

So why do so many people spend so little time on getting their largest financial commitment sorted out correctly especially when there are some very good mortgage brokers that will review people’s loans (for free) and often suggest a few small changes that might save thousands of dollars each year.

Of course, as mortgage brokers we are always chasing the best interest rates too.

How To Choose The Best Home Loan

This is a question that everyone wants to know “how to choose the best home loan”…

When you consider all of the banks and other specialist non-bank lenders have a range of options it all equals a lot of choice for you. Of course, only mortgage brokers really have the range of home loan choices for you but even the banks have some options and could structure a home loan to e better for you rather than easier and more profitable for the bank.

As a mortgage broker it is always pleasing to have the opportunity to talk with people and explain the advantages of working with a mortgage broker.

Let me share the key things we talked about.

Interest Rates

Yes, we talked about the home loan interest rates and how the various banks take turns at offering the best interest rates.

There are some very good interest rates available at the moment and you can find the advertised interest rates on this website, but as mortgage brokers we can often negotiate even better interest rates that the advertised “specials” that you may see.

We do not suggest that you chase the lowest mortgage rates all of the time as your strategy is more important.

The Importance Budgeting

It is important to think about how good you are with money.

Some people are exceptionally good at managing money and not over-spending, while most of us are not as good at this. I personally find that budgets are hard and while we can all make a budget it is a whole lot harder keeping to it. We tend to have continuous ‘one-off’ expenses that wreak havoc to any budget we are trying to stick to – the dentist, new tyres, a school trip, new washing machine etc …

Many accountants will talk about the importance of budgeting and in business or households with good earnings it is easier, but the fact is that budgets do not work for most people and therefore we use other strategies to achieve the same (or better) results.

Debt Consolidation

Often when we review mortgages with people we discover that there is some other debt that they have. Most often it is a credit card that they are struggling to get rid of, a store card or hire purchase that has quite large weekly repayments or a student loan, tax debt or money owed to family.

It is great to be able to wrap all your debt up into your mortgage so you can take advantage of the low interest rates, but you need to also ensure that you do not get into more debt and preferably pay off any debt that you have consolidated into you mortgage.

We are happy to talk about debt consolidation with you and introduce you to our strategy for dealing with it.

Paying Off Debt / Mortgage Reduction

Almost everyone wants to pay off their mortgage faster and get themselves into a position where they are not having to pay those mortgage repayments every week, fortnight or month.

You may have seen people advertising the “magic formula” for paying off debt faster and while there are some simple things that can help, most of the debt reductionstrategies will take some effort and sacrifice over the short-term.

We are happy to discuss some of the strategies and help you implement those one’s that will work best for you.

The Key Is Loan Structure

When we meet with people either to arrange a home loan or to review an existing home loanwe almost always have the discussion about the ways to structure the loans.

Over the years we have seen different loan structures and concepts and have a pretty good idea of what works and what doesn’t. This is something that we have always offered as afree service and it does not mean having to change banks either.

When we look at creating or choose the best home loan for people we need to consider both the loan structure and a strategy that suits those people.

Structure and strategy is the key.

Contact one of our team: Freephone: 0800 100 939

Today I had a lady visit the office and we focused our conversation on how to choose the best home loan.

More Kiwis Are Building A New Home

In a real estate environment where there is a shortage of properties for sale (listings) and so many going to auction it is not surprising that more people are now looking at building a new home.

It is a fact that Kiwis love property and most of us dream of one day building our own new home, but to many of us this is just a dream or something that we think we might do later in life. What many people don’t know is that it is easier to get new build finance in many cases which makes building a very viable option.

Building New Shouldn’t Be Hard

Some people expect that building a new home is hard.

Yes, there are some stories of people that have had problems with their new build, and there are a lot of people that will have experienced delays; however when you use a reputable builder or building company and plan properly then any problems can be minimised.

My name is Stuart Wills and I am an Auckland mortgage broker, but we have also recently finished building a new home in Hobsonville Point in North West Auckland. The experience with the building company was good and there were no major issues with the build either and the house was even completed within the expected timeframe. Of course being a mortgage broker we had the finances arranged in advance so our new build finance went through without a hitch and with the way we structured things it meant we were able to shift into our new house on practical completion rather than having to wait for the Auckland Council to issue the code of compliance. 

When most of us decide that building a new home is a good idea we are entering into something that we have no experience with.

With many new builds there are a lot of decisions to be made; however in many new developments the building companies have designed house and land packages that are planned so have limited options or choices for you to make.

Advantages Of A New Build

There are many advantages of a new home.

The major advantage that people perceive is that you get to build a house that suits your lifestyle.

While this can be true, most of use are limited by our budget and how the property developer has designed the area. New suburbs like Hobsonville Point are quite structured, whereas other areas leave more options to the individual people. There are pro’sand con’s for both – a planned development means your choices are limited, but it also means you know exact what is being build next door and details like where the windows go are planned to offer maximum privacy for everyone.

There are the physical advantages with a new house too.

Just like new cars and more economical and better featured than older cars, the same can be said about houses. New builds are constructed using modern materials and building practices meaning the houses are a lot more energy efficient and often planned better to take advantage of the sun and light to make the living environment more pleasant for living in.

How often have you been in an old villa which may have a lot of character, but also has a lot of drafts and dampness. If you look closer many old villas have rot that needs repairs or the owner has made a lot of effort and spent a lot of money to maintain the house.

Then there are the leaky homes – the last thing you want to experience is a leaky home!

There are many advantages of having a new home built with a warranty too.

Do Your Research

You hear of people that get stressed when building a new home, and when you hear from those people the issues seem quite real too.

Generally stress is caused by unexpected things happening.

Most new residential building projects these days have had a lot of planning. The building companies have very good planning and project management software so they can plan and track each each and every step of the project. The two areas that are often out of their control is the dealing with Councils and the management of trades people.

Where people often feel let down is with how the project manager or building company communicates with their customer – with you.

Doing your research and setting realistic expectations will help you through the build process. Part of this process should be to get the right people with experience that can offer you good advice like your mortgage broker and new build specialist Stuart Wills.

But who can help you with this?

Arranging The Best New Build Finance

Many people will just go directly to their existing bank to source the new build finance, and in many situations the person at the bank is able to arrange some finance which seems okay.

The problem is in many cases the finance that has been approved is not really okay.

When you are building a new home there will be enough for you to do without having to worry about the finance and dealing with the bank. As an experienced mortgage broker it would be easy to say “I know about new build finance” but having recently been through the building process myself too I can say I really know about the whole building process including the new build finance that is required.

Unlike many other people that source new build finance, we are experienced Auckland mortgage brokers in the true sense and have access to most banks and non-bank lenders. We are happy to work with your existing bank to ensure that you get the finance that is needed and at a competitive rate too.

You should contact the Kiwi Mortgage Man, Stuart Wills at The Mortgage Supply Company.

Lets Talk About Bad Credit Home Loans

Banks will usually view any credit issues as a problem that stops you getting a home loan; however Stuart Wills is the Kiwi Mortgage Man and can offer non-standard home loans which are specifically designed to help people that may need bad credit home loans.

Having bad credit does not mean you are a bad person, but it may mean you have gone through a bad spell in a relationship, a health issue, some traumatic experience, a problem with business or just plain old financial pressures.

We know from experience that there are times in our lives where it is easy to avoid or ignore our finances and especially when we don’t know what to do or how to cope.

Find Out About My Credit Rating

This is almost always the first thing to do when you are going to be applying for one of the bad credit loans and sometimes you can be pleasantly surprised too. When you apply for credit or a home loan the lender (or broker) will complete a credit check on you with a company like Veda.

Your credit report shows the lender information on your history such as how many times you have applied for credit, any payment defaults or debts sent for collection, any court judgements over debts and if you have ever been made bankrupt.

This report does not determine if you will be able to get a home loan, but we use it to determine if there is any credit issues that need to be addressed before your application for a home loan is submitted to a bank or non-bank lender, and in the knowledge that it may limit the options we have.

How To Deal With Bad Credit

Banks will usually view any credit issues or bad credit as a problem!

This does not necessarily mean they will not approve a home loan for you, but they deem you are a higher risk than someone without any past credit issues. They will therefore want to understand what happened to bring about the bad credit and also to know that this is not a pattern of behavior.

We know that no matter how hard we try to do our best, sometimes life just takes us by surprise. Business failure, sickness, separation, accidents, the unforeseen loss of a partner can all result in financial mishaps, impact your income and put extra pressure on you to meet bills, credit cards and mortgage repayments.

In our role as mortgage brokers we like to find out about any issues with a loan application and ensure that we explain them to any prospective lenders. We know how to deal with applications where there are issues, and how to get bad credit home loans approved.

Some Brokers Specialise In This Type Of Lending

Having a good mortgage broker is important when you need to source a mortgage, and this should be a high priority when you are looking for a non-standard loan like required if there are some credit issues. 

While you may have a finance broker near you, it may be prudent to use an experienced mortgage broker to source any specialist finance.

With non-standard lending there are limited options and lenders so it is important to give yourself the best chance with your loan application. Too often we hear of people that have been declined finance due to an inexperienced or lazy mortgage broker doing a sub-standard job with an application.

Contact the Kiwi Mortgage Man - Stuart Wills 

Stuart is experienced and knows how to get these non-standard loans approved and he can help you with a bad credit home loan application too.

We Should Always Strive For Excellence

As a Kiwi today it is easy to think of the manner in which many of my country people strive for excellence with the pride as I watched the New Zealand Olympic team compete.

In Business We Strive For Excellence

Most people go into business with the intention of being successful, but unfortunately most fail.

We all know when we are winners.

In business most people measure success in dollars – profits.

There are plenty of people in business that would be deemed as successful and some of those would not have money or profits as a driving factor; however many business coaches and accountants would only ever measure success if you have profits to show for your efforts.

As a mortgage broker success is extremely important as we are dealing with peoples lives and dreams. People expect us to get them the best deals, and of course we strive to get the best deal too.

Contact us or follow our finance blog if you want winners on your team.

In sport it is easier!

In Sport There Is Only One Winner

I love the fact that sports people strive to win!

There is a winner and the first loser and nobody wants to be anything but the winner.

Of course in today's “PC” world there are the people that say participation is important, but they are the people that have generally never won much. In sport we compete to do our best and ultimately to win.

It just is better.

Maybe Home Loan Rates In New Zealand Are At The Lowest Now

As a leading New Zealand mortgage broker I get asked all the time if it is better to wait for home loan rates to drop, or is it better to just refix my loans on the rates offered today.

In the media the messages are quite mixed, but most people think that rates will drop again at least once before Christmas.

But will the interest rates really drop again soon, and is it best to wait?

Should I Wait For Home Loan Rates To Drop?

This is a really good question at the moment as there has been some talk about The Reserve Bank adjusting the OCR again before the end of the year.

There has been a lot of talk about another fall in interest rates, but I’m not so sure.

My name is Stuart Wills and I have worked in the financial services industry in New Zealand for almost 20-years, and while I do not profess to know everything about finance I have some experience to share.

It is this experience as a New Zealand mortgage broker that means I am often sought out to provide opinion on the mortgage market here.

This is a short video where I share my view on interest rates and why I believe that we may not see another cut to home loan rates this year.

As a mortgage adviser we cannot predict what will happen with interest rates, but we can have a look at what is happening and share our thoughts with you.

Please feel free to subscribe to my You Tube channel or read my finance blog where I have posted an article on the subject of home loan interest rates, and more importantly asked the question will home loan rates be cut again this year.

Or if you want to discuss this then you can contact the office and talk to myself or one of the team.

Blogging Helps Our Mortgage Business Thrive

These days most businesses have a website but many bare very static and dare I say "boring" too.

So if you are going to have a website, why not make it interesting and relevant?

Maybe it is because the business owner has not understood the value of the website, is too busy working in the business or believes that they do not have the expertise to keep the website updated.

My name is Stuart Wills and I am a New Zealand mortgage broker who does blogging to help promote our business and website. Here I have written about the three key reasons that I suggest business people do blogging and a little about how I have learned about blogging and marketing.

Three Reasons To Write Blog Posts

I started writing blogs a couple of years ago when we were part of Mortgage Link and established a new website for the business in Auckland. 

As an Auckland mortgage broker in a large market like Auckland it is hard for your website to get found on Google searches so I decided to write blogs in an effort to get the website to rank for the key search words like "mortgage broker" and "Auckland mortgage broker" as well as others.

1: Get Free Website Traffic

I was keeping an eye on the keyword rankings using some smart Kiwi software called Traffic Travis and I still use this today. Once I started writing the blog posts the website started to climb in the rankings until we were consistently on the front page for the key search words that I was targeting.

Of course we recently resigned from Mortgage Link and joined The Mortgage Supply Company and had to start the process again with the new brand and website but this time it has been easier. Using Traffic Travis (which you can get a free version of - CLICK HERE) I have been keeping an eye on how the keywords are ranking and using Google Analytics we have been watching the site visitors too and it has been pleasing to see the results after just a couple of months and without spending a single dollar on Google Adwords.

This is all free traffic coming to our website and from this people can see what we do and make contact with us.

2: Be Recognised As An Expert

In a business like mortgage broking we are primarily selling our expertise and experience. People can go directly to a bank to arrange a loan, but people choose to talk to a mortgage broker when things are a little less simple, when they find the banks a little too difficult or when they want to know that all options can be explored and they will get the best deal.

My blogging gets read and shared on social media which is great and produces business leads, but it also means that I now get contacted by people in the mainstream media seeking comment for articles that they are writing and this helps elevate me as an expert.
Of course it is the person not the brand that is the expert.

When we decided to leave Mortgage Link a key issue we wrestled with was to leave a brand that we had spent years building a reputation for; however we spoke to a few people and established that in the mortgage broking business the brand not as important as the person (the expert) in the eyes of the customer.

Of course the brand is still important so once we decided to leave Mortgage Link we needed to consider our options carefully in regards to a new brand. We looked at a few options and decided to join with The Mortgage Supply Company as they are highly respected with the lenders, progressive with technology and most importantly have similar business values and ethics to ourselves.

3: Blogging Brings Direct Business

Many of the blog posts that I write and publish in my finance blog or personal blog bring in little or no business and that is fine as this was never the primary reason to write; however some of the writing that I do gets shared on social media, gets a huge number of views and leads to direct business.

I recently was watching The Block final when the houses were sold and everyone was in the "wow" space with the prices that were achieved. 

Being a numbers person I did some calculations and commented that it might not be quite as good as it seemed. Doing my numbers and factoring in the real costs that I might have doing the same project I decided it was not as great as it was being made out to be.

I wrote a blog post and it went viral.

I shared this on our business Facebook page: CLICK HERE
You can read the full blog post on my finance blog: CLICK HERE

This one post got a reach on Facebook of over 6400 with 1300 people engaged and 96 reactions being comments, shares etc and a few more page likes too. Again this is without spending a single dollar with Facebook.

You Don't Need To Be A Great Writer

I am not great at writing but I do believe I am a good mortgage broker and have ideas to share, and writing blog posts has been something that I have started doing and it has been successful for our business.

The key to blogging is to be consistent and provide good information.