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  1. #1

    Default NZ herald article

    Here is an article out of the NZ herald on thursday, a very silly article which blurs the line between home buyers/investors. The couple in question did not want to over commit to a huge mortgage but already did, they cried foul when the rules changed and they could not borrow as much. They said they could have spent 800k if they were buying for their own home, but somehow thought they could afford repayments if someone else was paying the mortgage. Just seems they thought PI was a good idea as everyone else seems to be doing it!!

    Have a read and a good laugh at this:

    Couple's plan lies in ruins

    Andrew and Shay Clark sold their Ellerslie townhouse and switched back to renting so they didn't "over-commit" to a massive mortgage.
    They still wanted a house big enough for their son to run around in, and found weekly rent cheaper than mortgage repayments on a similar-sized house in the suburb.
    Their plan was to buy another property in a lower-price bracket and rent it out so they are still in the market for when they retire.
    But because they won't be living in the house - it will be an investment - they will have to stump up a 30 per cent deposit under Reserve Bank rules announced yesterday.
    They say they can't afford such a high deposit, but would be approved by a bank for a lower deposit had they been buying a home to live in.
    The rules won't apply if they build a rental property.
    "If we were to buy for ourselves and live there, we could spend about $800,000," Ms Clark said, "but if we buy to rent out, we can only spend $445,000."

    SOURCE
    Last edited by donna; 18-05-2015 at 10:15 AM. Reason: AWAYS put in a link to the source of your news quotes - thanks
    "Remember, people will judge you by your actions,not your intentions.You may have a heart of gold -but so does a hard-boiled egg".

  2. #2
    Join Date
    Oct 2013
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    There is just so much absolute crap in the herald at the moment. Every second article seems like it's either bagging property investors for inflating the market, or whining about the state of the market.

    I read in one that "if property continues to increase at the current rate, it'll soon be less affordable than in 2007, when interest rates were almost 10%". By definition that means that property in 2007 was less affordable than now. I understand it'll get worse if (when) interest rates rise, but right now isn't the worst it's been.

  3. #3
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    The couple could have just tell the bank they are buying for a home to live in, then upon settlement rent it out.

    Banks don't ask questions after if all mortgage payments are on time.

    Oh and whining doesn't help one bit.

  4. #4
    Join Date
    Jan 2015
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    Quote Originally Posted by Gary Lin View Post
    The couple could have just tell the bank they are buying for a home to live in, then upon settlement rent it out.

    Banks don't ask questions after if all mortgage payments are on time.

    Oh and whining doesn't help one bit.
    But then they're not victims and who would want to be accountable for their own choices?

  5. #5
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    Quote Originally Posted by Gary Lin View Post
    The couple could have just tell the bank they are buying for a home to live in, then upon settlement rent it out.

    Banks don't ask questions after if all mortgage payments are on time.

    Oh and whining doesn't help one bit.
    Good point Gary. I think you've just outlined a way around the new rules!
    “Our favorite holding period is forever.”

  6. #6
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    Quote Originally Posted by donthatetheplayer View Post
    Good point Gary. I think you've just outlined a way around the new rules!
    This trick has been used by a lot of first time investors who didnt own their first homes back in 2010 to borrow 90% from bnz...

  7. #7
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    Quote Originally Posted by Gary Lin View Post
    This trick has been used by a lot of first time investors who didnt own their first homes back in 2010 to borrow 90% from bnz...
    Seriously. That is just wrong. They shouldn't be lying about the house purchase purpose. That's almost the same as suggesting to hide the rent income and not to declare it to ird.

  8. #8
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    Quote Originally Posted by BigDreamer View Post
    Seriously. That is just wrong. They shouldn't be lying about the house purchase purpose. That's almost the same as suggesting to hide the rent income and not to declare it to ird.
    Actually investors were borrowing 95% by telling BNZ they were buying as their first home.


 

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