CCCFA Making Lending Painful 🏡🏦
My latest video discussing the changes to the CCCFA making lending painful for first home buyers and property investors.
I’d love to talk to you about your finance and mortgage needs!
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Michael Anastasiadis | Mortgage Broker Wellington
FULL Video Transcript:
Good evening, everyone. It’s Michael Anastasiadis here from Bozinoff Mortgages, mortgage adviser, mortgages made easy. Coming to you live here on a beautiful Wellington evening. Look at that breath. You could see the breath there floating out of my mouth. It’s actually a very beautiful evening here, you might be able to hear the birds chirping in the background. Mount Kaukau there in the background.
I just thought I’d jump online. I’ve been absent a little bit off the lives for the last week or so. I’ve been busy doing a training for these new rules and regulations coming in, governing financial advisors and mortgage advisors, and things like that. All part of this new, updated Credit Contracts and Consumer Finance Act, which for me equals pain, scrutiny, suffering, mortgages not being made easy, opposite my tagline. I’m just getting up to speed with that.
I just thought I’d just jump online, and just share a few things from what I’ve been reading, and what I’m learning, and what I’m seeing the banks currently apply. Now, remember this isn’t specific advice. This is just general advice. Just me sharing some opinions of what I’m seeing out there. What I’m seeing out there is, getting lending is becoming harder, mortgage rates are going up. So it’s getting more expensive.
The banks are scrutinizing. My goodness, they’re scrutinizing nearly everything. So, expenses. Income, they always would focus on income. If you’re self-employed and you’ve ever gone to get a mortgage, all the financials you have to provide, the tax records, the stuff from your accountant. Ugh, that’s difficult for a lot of people, but now they’ve going through expenses like that as well. They’re looking at everything. Afterpays, lay-bys, you name it, they’re looking at it.
They want to know the limits. They want to know [inaudible 00:02:13] your spending patterns. If you’re paying too much in your KiwiSaver, they take that into account. Not into account that once you find a house, you’re going to drop it back to 3%. Things like that, they’re scrutinizing it. The servicing, which means how much disposable income you’ve got left after paying your mortgage and expenses, is becoming harder. So it’s really becoming tough, guys.
I’m actually starting to see clients come to me because they’ve been declined by their bank, or the own bank won’t look at it. So I’m having to look at other options for them. I can also tell you, third-tier lending or non-main banks, I’ve done videos on that in the past, they’re going to become more and more of a common thing as things become more and more difficult. Interest-only, a lot of people used to just get interest-only for 2, 3, 5 years, roll it over again for another 2, 3, 5 years. Even that’s becoming more and more harder.
Sometimes, you’ve got to take that to another bank as well. Uplifting and going to another bank is easier said than done. So there’s a lot of things happening. People say to me, “Oh, but I’ve been with my bank for 20 years, 15 years.” Loyalty doesn’t come into an application. That’s not a factor, that the banks look at how long you’ve been with the bank, or that you’ve never missed a payment. If you’ve missed payments, that comes into it, but it doesn’t matter how long you’ve been there. What loyalty? It’s got nothing to do with anything.
There you are, guys. I just thought I’d jump online, just share this video. The level of inquiries I’m getting is still high. It’s tough, like I said before. Especially for investors, people that might’ve bought a house last year thinking “Oh, I’ve now got a lot of equity. Let’s see if I can buy another house.” It’s not that easy, guys, because the equity you’ve got, minus the lending you’ve got, and need to service a whole another loan. Here in Wellington, most houses are now about a million bucks. People don’t have that income to service their existing mortgage, let alone a whole new one.
There you are, guys. That’s my little update. Yeah. Sorry to be the bearer of bad news, but it is getting difficult. If you know of someone or you’ve been declined, you’re not alone. Feel free to get in touch, and we can either commiserate, or we can look for a path or some alternatives to see if I can help you going forward. For those of you that are home with the tamarikis, enjoy the school holiday.
For those of you up in Auckland, my goodness, I feel sorry for you guys. You guys are going through really, really hard. I’m not wanting to get all political, but I just hope this roadmap doesn’t turn out to be like the last journey I remember going on with John Mitchell and that World Cup all those years ago. Good luck, guys. God bless, ka kite, kia kaha, and we’ll be online soon again with another live video.