Some frequently asked questions

Does it cost me to use a mortgage adviser?

The mortgage and insurance advice that you get from us will cost you nothing. We are remunerated for a standard residential mortgage by the lender when the contract is completed. There may be a fee for commercial contracts which varies on a case-by-case basis.

What is the difference between a mortgage adviser, a mortgage broker or a mobile mortgage manager?

If you have heard these names bandied around, then the difference between mortgage ‘Brokers’ and mortgage ‘Advisers’ is… well… nothing. We used to be call ‘Brokers’ but no longer can be so are called ‘Advisers’. Two main benefits in using a mortgage Adviser; first because all banks have slightly different criteria then I can ensure you get the best approval, but also we negotiate interest rates with the bank(s) on your behalf. We negotiate interest rates on a daily basis so know when the bank’s offer is their best.

Mobile mortgage managers (sometimes called mobile managers) are ‘employees’ of a particular Bank, therefore can only offer you a housing loan (and interest rates) from the bank they are employed with.

What are the Benefits of using a mortgage adviser instead of going direct to the bank(s)?

Two main benefits in using a mortgage adviser; firstly, because all banks have slightly different criteria then we can ensure you get the best approval i.e. the highest approval, or simply the best suited approval for you. But also, as a mortgage adviser, we negotiate interest rates with the bank(s) on your behalf. We negotiate interest rates on a daily basis so know when the bank’s offer is their best.

We are very experienced lenders so you know the advice you receive will be honest and in the best interest for you.

What if I get an approval through you but the loan does not go ahead?

Some mortgage adviser’s will charge a fee for their time if they have sourced an approval, but loan does not go ahead. We at Luck Mortgages do not charge any fee (or anything) at all, as we feel if you have enjoyed working with us then you will be back at some stage, or you might even refer a family member or work colleague.

I have heard of ‘Break Fees’ with home loans, what are they?

Break fees only come in to play when you pay off your housing loan while it is currently under the ‘fixed’ rate period, or make a ‘lump sum’ payment on to your ‘fixed’ rate housing loan (most banks have an annual allowance when making a lump sum payments on a fixed rate housing loan where you will not incur a break fee) . If your housing loan was on a variable rate (also known as a hloating rate loan) and you repaid this loan there would not be any break fee.

Are all mortgage advisers the same?

Like in any industry there are people that have been around for a long time and have a lot of industry knowledge, and there are the others that have not (and you don’t know what you don’t know). Allan & Jessica have both been Lending for over 17 years each so have come across almost all situations. But even very experienced mortgage advisers will from time to time have to bounce off solutions with colleagues (or bank assessor), and with Allan & Jessica being members of the Mounce Group they have the advantage of doing so with some other top mortgage advisers in the Mounce Group.

Another area that sets us apart from a large majority of mortgage brokers is that fact they are accredited with all the major banks. A lot of advisers have access to ASB, Westpac and ANZ, some may have access to one of the following three Banks being Kiwibank, BNZ & TSB. But we are accredited with all these banks (as well as the smaller specialises lenders). This is helpful for two main reasons; firstly, we can ensure we can get the best interest rates for you (and ‘Cash Contribution’), but also if your situation is a bit challenging we have more banks/lenders to play with (with slightly different criteria) resulting in a better chance of an approval.

What if my house depreciates in value, will the Bbnk force us to sell?

As long as your housing loan repayments are being paid, then you should not be on the banks radar. In our 17 odd years Lending (each) neither of us have seen a bank put pressure on a client to sell a property when they are meeting their loan repayments.

What is ‘LVR’?

The quick answer is ‘Loan to Value Ratio’. This relates to the amount of ‘Deposit’ you have verses the ‘Value’ (or Purchase Price) of the property being used to secure the housing loan. So, in fact it is a percentage. To give you an example; if you were purchasing a new home for $500,000 and you had a $100,000 deposit, then the LVR would be 80%. Yes, it is possible to have a deposit less than 20%.

Where do I start?

The best thing to do is have a chat with an expert right from the start. Yes, this sounds like a salesperson thing to say but too often do we hear things like “my workmate told me….” Or “my parents said I can do it this way”, which may have been the case a few years back. As we say, arrange a time to meet an experienced mortgage Adviser, or a simple phone call to have any initial questions answered. An experienced mortgage adviser will know the latest rules and restrictions, and give you the correct information from the start.

How much deposit do I need?

It is possible in some cases to have as little as a 5% deposit, and this can come from Kiwisaver. It is helpful to have a 20% deposit, but this is not always realistic, especially with house prices increasing as quickly as they have in recent years.

An option can be using the parent(s) property to prop up the security (LVR) to ensure you get to 20%, but if not an option then no drama.

Do cats snore?

Apparently so. Can’t say I have heard a cat snore. According to Google (which is 100% correct I have been told) cats with shorter noses snore the most (or maybe loudest). But if you were wondering, NO they cannot apply for a home loan, even if earning an income. If you have a cat that snores loudly, no we can’t cat-sit when you go on holiday.

How do I work out how much I can borrow?

The best bet is to have an experienced mortgage adviser to work out reasonably accurate the maximum housing loan you can do to. In some cases, this does not take too long to calculate.

What you do have to be careful doing is working out your own budget and thinking “I have $500 a week to put towards housing loan repayments”. There are other factors to take in to consideration.