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95% mortgages going or soon will do.......

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  • 95% mortgages going or soon will do.......

    I've noticed the Banks pulling back bigtime from 95% loans unless the case is really strong. In my opinion this will deter quite a few young Kiwis from buying yet do nothing to stop the rampant house price rises we are seeing in Auckland. It's the supply of property that's the issue, not the supply of high LVR loans. Thoughts?
    www.ilender.co.nz
    Financial Paramedics

  • #2
    95% of house buyers probably dont buy at 95% LVR, so the effect shouldn't be huge on the market.

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    • #3
      Yes, but to be fair NovInvestor, if we assume that number to be around 50% what it means is that:

      - 1 in 2 buyers is discouraged to buy a house.
      - The report here shows that it takes a standard buyer 8.5 years to save 20% deposit. Probably means that each 5% savings takes 2 years on average.
      - In turn, it means that 50% of the first home buyers will need another 2 years or so to save for their deposit to get to 10%.

      Now who knows what the deposit requirements would be 2 years from now..! Or the House prices...!! Or if the assumption of 50% is correct, could be more around 60-70%. But that brings me back to the original question asked by brokerman.

      I think deterring first home buyers from buying will, in the long run, bring down the prices but that decline will be very hard to see and will be affected by other variables such as growth in economy, immigration, etc. I also think that it is a very ugly way of rationalising the house prices. But the other option talked about is introducing the capital gains tax, and I for one, do not want that to be introduced for sure.

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      • #4
        I'm in talks with a private lender who is Kiwi and pretty p*ss*d off that ordinary Kiwis are being locked out so we're putting together a 90% plus 5% 'topup' that together with the 5% savings makes it work. Not finalised the numbers but the aggregate rate comes out at under 6% with the 5% topup being over 5 or 10 years and secured by Caveat. Servicing obviously needs to be strong and minimal current debt.
        www.ilender.co.nz
        Financial Paramedics

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        • #5
          Originally posted by ithink View Post
          The report here shows that it takes a standard buyer 8.5 years to save 20% deposit. Probably means that each 5% savings takes 2 years on average.
          In turn, it means that 50% of the first home buyers will need another 2 years or so to save for their deposit to get to 10%.

          Yes I agree that saving up a decent deposit to buy a home these days is very hard... but that is the reality of the situation now, interest rates are low, LVR lending is high, and this will just push house prices up with the demand we have right now...

          So for first home buyers, tough luck... work harder work smarter... get ahead of the rules of the game...

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          • #6
            Originally posted by ithink View Post
            I also think that it is a very ugly way of rationalising the house prices.
            You really didn't expect anything coming out of the woodenheads
            in Wellington would consider the law of unintended consequences,
            did you? Or deal with causes? Symptom-chasing is just so much
            easier!! And often far more politically expedient, as well.
            Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

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            • #7
              Originally posted by brokerman View Post
              I'm in talks with a private lender who is Kiwi and pretty p*ss*d off that ordinary Kiwis are being locked out so we're putting together a 90% plus 5% 'topup' that together with the 5% savings makes it work. Not finalised the numbers but the aggregate rate comes out at under 6% with the 5% topup being over 5 or 10 years and secured by Caveat. Servicing obviously needs to be strong and minimal current debt.
              ASB were going to do 90% on our new home, then at the last minute changed to 80% as credit department "were not completely happy with the security".
              Needless to say, my broker is telling them to get it sorted or I am moving to another bank.
              What banks are good for PPOR and can do 90% - I am thinking of Kiwi bank.

              While banks do 95% LVR for some first home buyers, they dont do 95% on PPOR for investors !!!

              Comment


              • #8
                Originally posted by Bluekiwi View Post
                ASB were going to do 90% on our new home, then at the last minute changed to 80% as credit department "were not completely happy with the security".
                Needless to say, my broker is telling them to get it sorted or I am moving to another bank.
                What banks are good for PPOR and can do 90% - I am thinking of Kiwi bank.

                While banks do 95% LVR for some first home buyers, they dont do 95% on PPOR for investors !!!
                Maybe try BNZ or ANZ? they are usually the easier banks to lend from.

                Also yeah, 95% only happens once, and after that 90% for 2nd and 3rd properties etc...

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                • #9
                  Originally posted by NovInvestor View Post
                  Maybe try BNZ or ANZ? they are usually the easier banks to lend from.

                  Also yeah, 95% only happens once, and after that 90% for 2nd and 3rd properties etc...
                  A contact from Ron's group, whom I met for a coffee once, she put me on to the residential bank manager unit that BNZ set up.
                  And they got me 4 IP's at 90% a while back while the other banks were still in the cold.

                  How are you guys finding refinancing against higher property prices, and keeping that 90% going ?

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                  • #10
                    Originally posted by Bluekiwi View Post
                    A contact from Ron's group, whom I met for a coffee once, she put me on to the residential bank manager unit that BNZ set up.
                    And they got me 4 IP's at 90% a while back while the other banks were still in the cold.

                    How are you guys finding refinancing against higher property prices, and keeping that 90% going ?
                    I'm fortunate/unfortunate that I never needed/given 90% finance to buy, but yeah I would suggest keep at 90% LVR after the first refinance, and use the extra money to keep buying.

                    After sometime, the second refinance on the same property to reduce LVR to 80%. This can be done simply with a QV online report if the market has moved up heaps (usually 1-2 years over the past 3 years).

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                    • #11
                      Originally posted by Bluekiwi View Post
                      What banks are good for PPOR and can do 90% - I am thinking of Kiwi bank.
                      While banks do 95% LVR for some first home buyers, they dont do 95% on PPOR for investors !!!
                      You are right about both here.. An investor friend just got his done through them for the 90% on her PPOR. And got somewhere around 4.79% for a short term fix, I think. Not a bad option at all, I say.

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