The prospect of buying and selling in this market can be scary, but enlisting the support of an experienced mortgage adviser who really ‘gets it’ can remove all the uncertainty.
As our circumstances change, we find ourselves needing or wanting to move: to set up our first family home, upsize or shift locations – perhaps to be closer to grandparents or in a different school zone.
But the process of shifting house can be a daunting one, especially as we contemplate rising house prices, increasing lending costs and tighter bank lending.
In Christchurch alone, the average house price grew by more than 30 per cent last year – the highest leap of any city in the country, says Loan Market Paramount Director and Mortgage Adviser Nathan Miglani.
The relentless rise of property prices has seen a raft of changes designed to take some of the heat off, Nathan says – with Loan to Value Ratios (LVRs) being instigated, scrapping interest deductibility for existing properties and a rise (or two!) of the official cash rate (OCR).
The central bank has indicated it remains on a path of more increases for the OCR, says Nathan, “which indicates that we can expect home loans to continue to become more expensive over 2022”. However, Nathan suggests that the surprisingly sharp increases of 2021 mean much of the pain has already been felt.
Finding the perfect property for the family to come home to is integral to feeling
safe and contented.
With that, it’s crucial to make sound financial decisions. “Whether your goal is to pay off your mortgage faster or to kick start your property portfolio, how much you borrow determines the best lending strategy for you,” says Nathan.
The job of moving out and moving in, while tricky when you have kids, is softened,
of course, by the excitement of finally being able to set up your new family home.
The key is to find an experienced, local mortgage broker to cut through any confusion and walk you through the process.
How are you managing?
With living costs going through the roof, Kiwis have shared their top tips for managing family finances. As part of a survey into handling the high cost of living, independent economist TONY ALEXANDER has collated numerous suggestions from 450 respondents.
Top tips for 2022
- Reduce buying café coffees, reduce the times you eat out and entertain at home.
- Make your own lunch and do weekly baking for kids’ lunches.
- Sell unwanted items on Trade Me.
- Grow your own vegetables.
- Make a budget and stick to it. Don’t deviate from your supermarket shopping list. However, buy groceries in bulk ahead of time if on special.
- Review your expenses and subscription services, electricity and insurance.
- Calculate expected annual expenses and set up an automatic payment to an account ready to pay them.
- Cancel credit cards and avoid pay now-buy
- Reconsider buying another pet.
- Switch to cheaper holidays.
- Go vegetarian.
- Put bank account money to better use in alternative investments.
To read all responses to the survey, go to tonyalexander.nz