Tips

15
Jan
2018
Top 3 benefits of buying your own home in New Zealand

Top 3 benefits of buying your own home in New Zealand

While some regions are more affordable than others, there’s no denying that you’re going to have to dig deep in your pockets no matter where you buy a house in New Zealand. The costs involved with chasing the Kiwi dream can be a little daunting, but for most the pros far outweigh the cons. So, what are the benefits of buying your own home?

1. Greater stability

One of the less tangible (but by no means less important) advantages of home ownership is the security and stability it provides. As a tenant, you are more or less at the mercy of your landlord, and are always at risk of sudden rent hikes and eviction. In contrast, as a homeowner you can sleep easy knowing that, as long as you keep up with mortgage repayments, your home will always be there.

2. DIY nirvana

Most landlords don’t allow tenants to make big changes to the property. As a homeowner, however, you are free to fulfil all your DIY and interior design fantasies. Don’t like the tiles in the bathroom? Rip ‘em out. Feel like a fluorescent pink feature wall would enhance the living room? Go right ahead. There’s no one stopping you.

3. Capital gains

The third and perhaps most important benefit of buying your own home in New Zealand is that your money is essentially being invested in a very valuable asset that you will one day own. In addition, it’s highly possible that the value of your home will increase over the course of ownership, depending on current New Zealand home loan interest rates and wider economic conditions. In Auckland, for example, the price of the average three-bedroom property increased from $393,444 in 2005 to $726,209 in 2015, according to figures collated by Barfoot & Thompson.

Remember, if you’re looking to buy a house, make sure you compare the best mortgage rates in New Zealand before jumping in blind – it could save you thousands of dollars!

The PocketWise Team

Posted by pwadmin in First Home Buyer, General Finance, Tips
28
Dec
2017
3 totally free personal finance apps you need to install today

3 totally free personal finance apps you need to install today

In a world where Tinder and Snapchat filters and Pokemon GO (is anyone still playing that?) can be accessed on your phone with a casual flick of the finger, who really has time to be messing around with personal finance apps?

You.

Yes, you.

Whether you’re working on paying off your credit card debt or saving up for a winter escape to somewhere tropical, here are three of the best apps you should have on your phone:

1. Wally

Wally is the perfect app for anyone who’s ever wondered where all their money goes (i.e. all of us).

The app provides detailed insight into your personal finances, and allows you to see not only how much money you spend, but also where you spend it and who you spend it with. Simply scan all your receipts and let Wally take care of the rest.

Available on Android and iOS.

2. PocketSmith

PocketSmith is one of many modern apps that automates budgeting tasks by connecting directly to your bank account and using this data to help you track your spending and saving.

The key difference is that PocketSmith was developed here in Aotearoa, and consequently actually works with local banks (unlike Level Money, PocketGuard, Qapital and a slew of other popular personal finance apps).

Track income and expenses, create cash projections and customise your budget to suit your lifestyle.

Available on iOS; the Android version is still in development.

3. Goodbudget

It might not have the most imaginative name, but Goodbudget is an excellent tool for families, flatmates, couples and anyone else who shares expenses. Set budgets for the various outgoings in your life (e.g. groceries, petrol, utilities, etc), create savings goals and sync it all across users and devices to ensure everyone’s on the same page when it comes to the household’s finances.

Available on Android and iOS.

Know of any other cool apps to help with personal finances? Chuck them in the comments below.

Happy saving, PocketWise

Posted by pwadmin in General Finance, Tips
21
Dec
2017
4 Tips to Get Your First Mortgage Loan Approved

4 Tips to Get Your First Mortgage Loan Approved

Buying a home is, for most of us, the biggest financial investment we will make in our lives. So it’s no surprise that we can’t just walk into the bank and sign the dotted lines. For aspiring first home buyers, there are a few things you can do to increase your chances of getting your mortgage approved.

Tip 1: Get a Job, Stay in a Job

When banks lend you money to buy a property, they inevitably want to make sure you’ll be able to repay your loan. If you don’t have a consistent job, banks can’t be sure that you will be earning a consistent wage or salary to be able to meet your repayments. When you have consistent income, it not only makes it easier to assess how much you can afford, but also helps convince the bank that you will be able to make the repayments when they fall due. It also shows banks that you have the temperament and maturity to commit to something in the long term – which is exactly what your mortgage will be.

Tip 2: Reduce Debt

Another big factor which banks will consider is how much debt you owe to your creditors. You don’t necessarily need to have zero debt, but the less you have, the better. If you have credit card debt, or a loan on a car, it’s a good idea to try and reduce these as much as possible before applying for your mortgage. Not only will it improve your chances of getting approved, but might also increase the loan amount you can borrow.

Continued below…

Tip 3: Know and Improve Your Credit Score

Reducing debt will also have a positive impact on your credit score. According to creditsimple.co.nz, “A credit score is a number between 0 and 1,000 that indicates how credit-worthy you are, and how likely you are to pay your bills on time. Most credit scores are between 300 and 850. The higher the score, the better your credit rating is.” Banks keep a close eye on your credit score when deciding if they should lend you money – it’s a good idea to keep track of your credit score, and try improving it where you can. Credit Simple is a great, free website that can tell you your credit score and how to improve it.

Tip 4: Save, Save, Save

LVR (Loan to Value ratio) restrictions imposed by the Reserve Bank mean that you generally need a 20 percent deposit for the the value of the house you want to buy. In other words, for a $500,000 house (this is still realistic in places outside of Auckland!), you would need a deposit of $100,000. Let’s be real – that is a lot of money, and saving that amount won’t happen overnight. But the earlier you understand these factors, the earlier you should start saving, and the better prepared you will be when it comes to actually getting a mortgage and buying your first home.

Hey, we never promised getting a mortgage was easy. The tips above won’t approve your mortgage overnight, but you’re better off acting on them now rather than later. With the right knowledge, a bit of preparation, and the right mindset, you can greatly improve your chances of getting your mortgage approved.

If you’d like to compare mortgage rates to see what you might afford, head over to our mortgage comparison now. If you’re ready to take the next step, as well as get the best mortgage deal for your first home purchase, submit a loan enquiry with a PocketWise partnered broker – absolutely free.

Cheers,

The PocketWise Team

www.pocketwise.co.nz

Posted by pwadmin in First Home Buyer, Mortgage, Tips
13
Dec
2017
Mortgage requirements part 4: Tapping into the HomeStart grant

Mortgage requirements part 4: Tapping into the HomeStart grant

Saving up for a deposit on a house is no walk in the park. Luckily, the New Zealand government offers a few different schemes designed to make things a little easier for property newbies, with the HomeStart grant being one of the most valuable.

What does the HomeStart grant provide?

The HomeStart Grant is a KiwiSaver feature that provides eligible first home buyers with a sizable cash injection (paid to your solicitor).

If you’re buying an existing or older home, you can receive $1,000 for each year you’ve contributed to KiwiSaver. There’s a minimum grant of $3,000 and a maximum grant of $5,000.

If you’re purchasing a new home, a property bought off the plans or a block of land to build a new house on, the HomeStart grant is effectively doubled. This means you get $2,000 for each year of contributions to KiwiSaver, with a minimum grant of $6,000 and a maximum grant of $10,000.

Compare your Kiwisaver fund On Pocketwise with others to ensure your Kiwisaver fund is right for you.

Am I eligible for the HomeStart grant?

You may be entitled to a HomeStart grant if:

  • You do not currently own property or land.
  • You have never received a HomeStart grant or KiwiSaver deposit subsidy in the past.
  • You have been contributing to KiwiSaver for at least three years.
  • Your pre tax household income is less than $85,000 for one person, or less than $130,000 for two or more people.
  • You have a deposit of at least 10 percent of the property purchase price (including the HomeStart grant and KiwiSaver first home withdrawal funds).
  • You are going to live in the house for a minimum of six months.
  • The property costs less than the house price caps ($600,000 for Auckland; $500,000 for most other urban centres; $400,000 for everywhere else).

Check the official site for further eligibility criteria.

Need more help with the cost of buying a home? Save big in the long term by using our nifty calculator to get the best mortgage interest rates in New Zealand.

Posted by pwadmin in First Home Buyer, Mortgage, Tips
01
Dec
2017
Why you should be using a credit card instead of a debit card

Why you should be using a credit card instead of a debit card

Squashed in alongside month-old receipts and business cards whose owners you no longer remember, there’s a pretty good chance you have at least one debit card and one credit card in your wallet.

While these cards are similar in function and damn near identical in appearance, most Kiwis are more inclined to use their debit card. In fact, in 2015 the average New Zealander made 234 debit card transactions and just 86 credit card transactions, according to figures collated by PaymentsNZ.

Here at PocketWise, we reckon these numbers should be a lot closer. Here’s why you should be reaching for your credit card instead of your debit card:

1. Get free stuff

When using a debit card, the money required for a given transaction is taken from your bank account with no return to you, the user. The money’s gone, end of story.

In contrast, many credit cards feature reward systems that essentially gives you free stuff (typically Airpoints, luxury goods or cash) for making transactions on the card. These rewards can stack up surprisingly fast and provide you with some compensation for all your hard shopping.

Use our handy NZ credit card comparison tool to find the card (and rewards!) best for you.

2. Improve your credit scores

You might not realise it, but behind the scenes certain organisations are tracking your credit history (essentially how reliable you are as a borrower). Financial institutions use this information to decide whether or not to issue you a loan, grant you a mortgage and increase your credit limit.

Using your credit card and paying it off on time is an effective way to build your credit score and prove to banks that you’re a trustworthy borrower. You cannot do this with a debit card.

3. Make sweet, sweet chargebacks

We’ve all been disappointed in the quality of a product or service we’ve purchased.

In this scenario, with a debit card, you’re more or less at the mercy of the merchant. With a credit card, on the other hand, you can dispute the transaction and, more often than not, reverse the transaction and get your money back.

Happy comparing, and saving.
PocketWise

Posted by pwadmin in Credit cards, Tips