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  1. #1

    Default Is paying cash better than a mortgage?

    I need some good advice. My father passed away about a year ago and he left me about 80,000 NZD. Im currently living over seas and Im not in the best situation. I have two primary school aged kids and im in an abusive relationship with their father. I am trying to decide the best move to make......I have been looking at houses in rural parts of NZ and I see that I can afford to buy a house in these areas for cash. It would leave me nothing left over but I would have a home to bring my kids to and start over. The longer I stay here the more money I spend and I want to try to buy something and invest my money before its too late. Can anyone give me some advice on where would be a good place in NZ to look for a home on my budget? Or is this even a good plan? Would it be smarter to go home to NZ first, get a job and apply for a mortgage for a nicer house worth more in a location where it wouls appreciate in value? The only thing that holds me back is that It would cost alot to move home and get set up to do this...not to mention that I would be a single parent paying off a mortgage. Or would it be better to buy a house with cash , move there and after a few years get an equity loan to buy another house and sell the first? I have no idea what would be the best direction to go.....any advice would be greatly appreciated.

  2. #2
    Join Date
    May 2004
    Location
    Bay Of Plenty, NZ
    Posts
    3,604

    Default

    Oh you poor thing!!

    First off, get out of that abusive relationship!!! Don't worry about buying a house - anywhere - until you've got yourself mentally, emotionally and geographically sorted.

    Don't just leap and make a decision (re moving back to New Zealand) until you're absolutely sure this is what you want to do. Is it the best thing for yourself and your children?? It may be that eventually that is the best option, but if you make a too sudden decision without thinking it through, you could end up coming back to NZ, only to be really unhappy and regretting it and have no further $'s to work with.

    Be proactive and STOP BEING A VICTIM. The future and that of your children, is in your hands.

    Go to a Woman's Advice Group or Woman's Refuge NOW!!!
    Patience is a virtue.

  3. #3

    Default

    Thank you for your advice essence. Im not being a victim , I know Im in a bad situation and Im trying to find out the best option to take now that I have options. I dont have alot of time as the longer I stay the more money gets spent...I have only been out of NZ for over a year and a half and im not in a country where im earning enoughto survive on my pay check alone. I really need some solid advice about where to buy in NZ and the best strategy to take on a home purchase.

  4. #4
    Join Date
    Jul 2011
    Location
    Tauranga
    Posts
    2,769

    Default

    At least you can admit it, its not good for your children and you really need help. Approach one of the groups above and know that you are doing the right thing by seeking assistance.

    The areas the cheap houses are in generally dont have much employment - have a look on www.seek.co.nz and www.trademe.co.nz under jobs.

    Have you got family here that can help you? If so seek there assistance, im sure you would do the same thing if they were in your situation - you need to do what is best for your children.

    Kia Kaha

  5. #5
    Join Date
    Jul 2011
    Location
    Tauranga
    Posts
    2,769

    Default

    Find a job and rent (share with family) first then deciede where you want to live what strategy to adopt . But first I would call on family as you will prob need them, so close to them would probably be best.

  6. #6
    Join Date
    Jul 2005
    Location
    NZ
    Posts
    977

    Default

    Hi Kimi,

    The answer to your first question “Is paying cash better than a mortgage?” is clearly yes. But you then go on to qualify it further by adding that you have $80,000 for the purchase of the house. There are very few areas where you can still buy a house for that amount but I can think of one or two. However I really don’t think these areas are the most conducive to bringing up children and getting a job. I know somebody who recently bought a really nice house for $35,000 in Ohura. This is a very isolated little town in the King Country, life would be difficult if you were not comfortable in such an environment.

    Follow this link to read about Ohura: http://www.ohura.co.nz/index.htm

    To find more areas where you can still buy a house in your price bracket, I suggest that you go to Trademe and do a search with an upper limit of $100,000 and see where it takes you. If you’re not familiar with the areas that the search is taking you, then post the area in here and see what people think of it.

    I can understand your concern about spending your ‘house money’. My suggestion, FWIW, is to get back to NZ as soon as you can, into an area in which you are familiar and then make your house purchasing decisions.

  7. #7

    Default

    I agree.

    IMO, going rural and espc buying rural would be a mistake.

    Perhaps renting for a while in a smaller town, but one that is still close to a larger centre.

    EG..Renting in Richmond or Motueka, which is still reasonably close to Nelson.

    However, as suggested. Being close to trusted family or friends if possible is also beneficial.

    Good Luck

  8. #8
    Join Date
    Sep 2007
    Location
    Christchurch
    Posts
    1,259

    Default

    What a hellish situation, and good on you for planning to get out.

    I agree with the others about renting for a few months or a year or so. If you buy, you're stuck in that place. If you rent, you can move for jobs etc.

    Prices are climbing in Auckland and the less-shaken bits of Christchurch but they're pretty stable elsewhere. You've got time.

    Plan your leaving carefully. Some abusers become more violent when their partner tries to leave. Having a local crisis group for help could be a good safety measure.

  9. #9
    Join Date
    Oct 2008
    Location
    Auckland/Melbourne/ whereever the money is
    Posts
    1,380

    Default

    A few other things you also need to think about:
    Be sure your inheritance is kept totally separate from the relationship property & in an account that is solely yours. The minute it is intermingled with "Family Property", he potentially has a right to 50% of it.

    If you come back to NZ & want to sign on to a benefit of any kind, then that cash nest egg will be taken into account as assets & in general you will be expected to live off that before you will be entitled to a benefit, regardless of the fact that you want to use it for a house. ie it will be consumed in much the same way as you are probably consuming it at present.

    If you buy a house for cash in a small town/ rural area, which probably is one of your only choices with 80k, unless you want an apartment, then as has been said, your employment prospects are likely to be limited, but equally your living expenses will also not be huge, as you will have no rent or mortage to pay, just rates, insurance, power, water etc on top of food & transport costs.
    In a lot of ways this is the least stressful path to take, disregarding the wisdom as a financial investment.
    The complication here is that if WINZ were doing a proper job (assuming you end up on a benefit in that town) they should be asking how long you have had the house, how you paid for it & if there is any money left on which you should be living before receiving a benefit.

    Buying a house with a mortgage forces you to get a job (probably even to get the mortgage) & raises your reliance on that job in order to pay your living costs. Any benefit is unlikely to pay your mortgage, although you may be entitled to housing supplementary benefit, maybe $100 pw or so, ie the rate is not related to the actual cost.

    As has been recommended, it is probably better to rent or stay with relatives for a while until you have a job sorted & have a better idea of where you want to live & buy a house. However there is still the issue of where to hold the money in the mean time & stop it being eroded.

  10. #10
    Join Date
    May 2004
    Location
    Bay Of Plenty, NZ
    Posts
    3,604

    Default

    What good advice everyone - well done!!!

    You didn't say where in NZ you had originally come from, so do you wish to go back there or somewhere fresh??

    Surprisingly enough there are still urban areas (Not Auckland, Wellington or Christchurch) where you can by small (2 bedroom) units for approx $120K. Yes, it is bigger $'s than what you can afford, but there are always ways and means of getting the balance.

    WHEN you get back to NZ, go to a Mortgage broker and talk it over with them. Then the next step is going to WINZ. Don't be proud of what job they offer you (not a criticism, just a comment). Once you've got a job, life is getting better. It's only the first step.

    Plan your leaving carefully. Some abusers become more violent when their partner tries to leave. Having a local crisis group for help could be a good safety measure.
    Absolutely.

    Remember - abuse is about power and control. NOT about love. Anybody who tells you different is LYING!!!

    It may be that you have to do your leaving on the quiet ie booking tickets and departure times. Again, find a Crisis Group that can help.

    There are so many people who will help you, you've just got to ask, both here and in Australia.

    Remember, the hard decisions start now, to make the later decisions easier. Yes, you will feel frightened, fuddled, confused and shaky. That's to be expected - just don't allow it to become acceptable.

    You don't realise how strong you are, you just need to discover it and believe it and act on it.
    Patience is a virtue.


 

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