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Preparing for Lending
There has been a lot of talk in the media about tightening lending restrictions and higher interest rates, making things more difficult for buyers. However, as off-putting as it all might seem, Rangitahi is still dealing with a steady flow of buyers and enquiries, signalling that as tight as some people might be finding things – there is still a lot of wriggle room if you know the angles.
There are many advantages of buying a section to build on rather than purchasing an existing property - one of the most significant benefits is time. With the new lending requirements in place, you will have the upper hand if you can talk to a mortgage advisor in the months before applying for lending so that they can set you and your accounts in good stead to put your best foot forward when the time comes for submitting your mortgage application. If you have been thinking about buying a section for a new build but are being put off by the media and the current property market, you’re not alone.
We spoke to Raglan local Mortgage Advisor Aaron Watkin from Loan Market NZ for his take on the current lending restrictions, how they might affect you, and how to get the most out of dealing with your bank when thinking about a section a new build.
Could you give yourself a little bit of an introduction and how you are connected to the Rangitahi project?
I am a Raglan local & have assisted clients with mortgage requirements in the Rangitahi peninsula development for the past five years. We have also personally purchased a section in the development to build an investment property.
There has been much commentary about tightening lending restrictions impacting mortgage applications.
Have you noticed this as a common theme in your business?
The impact of the new CCCFA regulations are starting to bed in, and we are all learning how to deal with them. Essentially, applications are taking a little longer to process as all information needs to be analysed and explained. Talk to us early in your decision-making process, so we can assess your situation and present your application in its best light. In today's environment, lending is not a one-size-fits-all approach. There are many solutions to meet most people's individual requirements, and your advisor will need to work with you to find the best solution for your unique needs.
What are your views on the impact of covid 19 on the property market and lending, and can you see an end in sight?
Covid 19’s biggest impact at the moment seems to be on the supply chain, and hence the availability of building materials. This will settle down over time. There is also an influx of people who want to move to the regions, and Raglan seems to be a popular choice with its lifestyle, proximity to Hamilton, and easy access to Auckland.
What are your views on the current new-build market within Raglan? Have you noticed any trends? I.e. buyers, lending, values, restrictions?
New builds are generally exempt from LVR restrictions, which means you can build a new property with a 10% deposit. There is very little existing stock on the market in Raglan, so each release of sections in Rangitahi adds to a depleted stock and they are sold very quickly.
Can you offer any advice on how to get the best out of the banks when applying for new-build and land lending?
Knowing what you want to do and a realistic budget to complete the build is probably the most important thing when first approaching a lender for a construction loan. Your architect, builder & Mortgage advisor should all be on the same page with the build around budget, time and requirements for the finished project. If you would like to chat with Aaron about your future projects, you can find him here:
Aaron Watkin mortgage adviser - Loan Market 0274 361717
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