This crazy weather can only mean one thing. Spring is near! Warmer weather often brings an influx of new properties to the market with opportunities to upgrade or invest. With a new spring in our step, the season change can encourage renewed optimism- proven to be a vital ingredient in financial success.
In this issue I discuss:
- the return of the beach house
- the importance of a positive outlook
- a service you may not know we offer – debt reduction.
| The kiwi summer |
(Photo by Mitchell Collins flickr.com)
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Nothing beats those endless weeks of summer spent at the beach. Lately I have come across a few people considering buying or building a holiday home. Unlike investment properties, banks are usually happy to approve holiday home purchases with just 20% equity. If you have a strong, solid income and want a potential long-term investment in an up and coming holiday hot-spot, buying a beach (or lake or mountain!) house might not be as unrealistic as you thought.
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| Thinking about selling? Watch out! |
Are you considering selling one of your properties, with another use for that lending in mind? Don’t expect your bank to maintain the status quo; it’s easy to get caught out here. The bank will likely ask you to re-apply for a new mortgage and if their lending criteria has toughened and you financial position has changed, the bank may not be willing to continue lending you the same amount. For example, if your investment property mortgage is $300K and you sell for $700K it makes sense to assume you will get $400K in your back pocket. But the bank may well ask for more, a lot more. Many clients have called me in tears because they walked away with less cash in their back pocket following a sale. Make sure to discuss your plans with your bank (or give me a call!) before going on the market.
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Mind Over Money - what type are you?
I have thoroughly enjoyed Nigel Latta’s new season of Mind Over Money on TVNZ OnDemand. The series helps you figure out your money personality and how this influences your financial decisions. What drives you and your relationship to money? Is it freedom, security, generosity or the satisfaction you gain from buying new things (whether impulse or planned)? Self-awareness is key to financial success, whether you are saving to buy your first home, or wanting to reduce debt. To find out more about the four money personality types, check out this article.
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One thing I know – optimism about the future is critical in making sound financial decisions. I’m not the only one who has figured this out, read this article about the link between psychology and financial capability to learn more.
Your own personal mortgage coach
If you feel like you have an unhealthy relationship with money (and you need a more positive outlook!) we’d love to help. Although we are here to help you borrow money, we can help you pay it off faster. Our Debt Reduction Service helps you take a longer-term view of your financial situation to reduce debt as quickly as you can. Acting as your personal mortgage coach, we make it easier to set goals, develop good habits and stay on track. Give us a bell anytime.
021 754 350 or 09 441 4020