Home or property ownership plays a big role in the financial lives of most Kiwis. So giving yourself some time to ponder your personal situation is a solid first step towards building financial resilience.
Resilience: it all starts with knowledge
Whether you already own property or have yet to get into the market, we hope you find this quick summary a useful ‘thought-starter’. It’s our hope that one or more of these tips will set you on a course of discovery. And of course, if you’d like to have a more detailed conversation specific to your personal needs, we welcome you to browse our member directory for a mortgage adviser near you.
For Home & Investment Property Owners
Already have a mortgage? These thought starters are for you.
Get ahead when the going is good
Unless a fixed rate expiry is coming up, it can be all too easy to let the mortgage tick along in the background, without thinking about whether you really need to carry the debt for the full term. If you find yourself in a position to make a lump sum payment or restructure to pay more, faster, it’s well worth looking into.
Build a buffer
Life is unpredictable, but mortgage repayments (generally speaking) are not. If you can, build a repayment buffer either by making extra repayments on your mortgage,
or by setting up a ‘rainy day’ fund for the unexpected.
Know the detail
How long has it been since you had a good look at the terms of your mortgage? Are there fees you could minimise? Does it have features you’re not maximising? And perhaps most importantly, do the features of your mortgage still meet your needs? We all change over time and so does the way we manage our finances. It may have made perfect sense to go with the comfort of a fixed rate table loan five years ago, but would another solution with more flexibility be better
suited now?
Keep communicating
One of the best mortgage resilience tips we can give you is to keep proactively thinking about your mortgage; don’t let it gather dust in the ‘documents’ draw. Mortgages are more than interest rate; they are a long-term commitment and as your needs,\ responsibilities and goals change, it’s important that your mortgage keeps step.
Foster some expert sources, talk to an adviser, and regularly consider the “what-if”: the good, the bad and the potential.
Planning to buy?
Have yet to get on the property ladder? These thought-starters are for you.
Know your options and get ready
Home-ownership plays a big role in financial resilience; it’s an asset that can create security and help to make other goals a reality.
If you’re getting ready to step onto the property ladder, don’t just focus on getting the loan; focus on structuring the loan to your needs. What do you want to achieve in the next year? The next two years? Five? The main point is: don’t fall into the behaviour of thinking about your mortgage only as debt; think about it as a tool, a vehicle for what you want to achieve; and make sure you understand all the ‘moving parts’ and how they will serve your needs, not just just the interest rate.
Daunted? Push through
There’s no doubt about it; the average house price in New Zealand can make homeownership seem like a daunting endeavour. But here’s the thing: property ownership is, and has been for eons, a fundamental pillar in creating personal financial security. So if the barrage of housing market commentary has led you to put home-ownership in the ‘can’t do’ pile, take another look.
Home-ownership plays a big role in financial resilience, and generally speaking creates an asset that can help make other goals a reality. We’re not saying it will be easy – because it
likely won’t be – but if you want it, with some expert advice, persistence and good planning, you might just surprise yourself. There are many options. Make sure that you know all about them. Gather plenty of expert information and set your mind to turning the ‘daunting’ into an achievement.
Please note that the content provided in this article is intended as an overview and as general information only. Please use your discretion and seek advice before making any decisions based on the information provided in this article.
