_**Please Note:** This newsletter was originally published on 15th September 2023. While the information presented here may still be valuable, some aspects may be outdated._

 

Spring has arrived, and with it comes the perfect opportunity to take the first steps towards your home ownership dreams. In this post, we'll teach you all about deposits, how to build them, how much you'll need for your home loan and what happens if you don't have enough?

Before you can step into the world of home ownership, it's essential to build a strong deposit. Here are some ways to piece together your deposit:

- **Cash Savings:** Saving a portion of your income over time.
- **KiwiSaver:**Utilising your KiwiSaver contributions for your first home purchase.
- **Kāinga Ora:** Explore government grants and loans through Kāinga Ora to boost your deposit.
- **Family Assistance:** Consider the support of family members, whether it's a loan or a gift.

For more information on building your deposit, or any other home loan related topics, explore our informative guides in Tella's Learn section [here](https://tella.co.nz/home-loans-mortgages/learn?). 

**Understanding Your Deposit Requirements**

The deposit requirements may seem complex, but we're here to simplify it for you. While some lenders may accept a 5% deposit for first home buyers, it’s common practice today to aim for at least a 10% deposit. A larger deposit not only opens doors to better loan options but also paints a responsible financial picture for lenders. Also, understanding your Loan to Value Ratio (LVR) is important, as it affects your interest rate. If your LVR exceeds 80%, you are likely to have a Low Equity Margin added on top of the standard interest rate.

**Starting Early: The Key to Your Success**

Kickstart your deposit journey as soon as possible. Banks consider your spending habits when assessing your loan application, so responsible financial behaviour is essential. Prepare a budget, closely monitor your expenses, and devise a savings plan that aligns with your goals. Going hard and being aggressive with repayments up front could save you thousands of dollars over the term of the loan.

**Why Prepare a Budget?**

A well-thought-out budget helps you:
- Keep track of your monthly income and expenses.
- Calculate how much you can save from each pay.
- Identify areas where you can reduce spending and increase your savings.
- Automate Your Savings

Make saving effortless by automating transfers from your income account to a dedicated savings account. This streamlined approach allows you to grow your deposit without the hassle of manual transfers.

At Tella, we're dedicated to helping you make informed decisions on your home ownership journey. Feel free to reach out for a free, no obligation chat with our mortgage experts.

[Book your call](https://calendly.com/tella-advisors/home-loan-expert-chat?) today, and let's make your home ownership dream a reality!

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Navigating the Deposit Journey

_**Please Note:** This newsletter was originally published on 4th August 2023. While the information presented here may still be valuable, some aspects may be outdated._
 

The belief that bank lending for self-employed individuals is tough and hard to obtain might have you wondering how to secure your own home. Well, don't worry, because we're going to break it down for you here.

Let's start with the most common question: 

**How do lenders and banks calculate income for self-employed individuals?**

It all comes down to proving consistent taxable income to the bank. Forget about gross sales; what truly matters is your sales minus cost of goods, minus expenses. But here's the good part – we have some flexibility when it comes to considering expenses. We often request to 'add back' certain non-cash expenses, like depreciation, as they don't involve actual money spent. Similarly, in some cases home office expenses can be added back as well.

It’s not a black and white process, and you'll need to have a good mortgage broker that understands these intricacies to be able to break it all down effectively.

Banks usually prefer an average of the last two financial years, but some may accept just the last one year. Given the rollercoaster ride businesses have experienced over the past three years, it's crucial to explain how things are expected to go moving forward.

**Don't have two years of good financials?**

Now, let's talk about low-documentation loans for self-employed individuals. While these aren't as common with main banks, some second-tier lenders still offer them. A low-documentation loan requires minimal proof-of-income documents, often just a one-page letter from your accountant estimating your income for the year. This type of loan can be beneficial if you have a solid deposit but have only recently started trading or took some time off, resulting in a less impressive previous year but promising future prospects.

**Don't have an accountant? No problem!**

If you're contracting with only one or two businesses and have minimal expenses to claim, we'll typically request your Inland Revenue submissions from the last two years. The income after expenses will be averaged out, and we'll also check recent business bank statements to ensure income consistency. 

**Do you have a side hustle?**

For those juggling a side hustle while working full-time, here's some good news. Side business income, whether it's from online ventures, weekend markets, or even Uber driving, can boost your chances of getting a home loan approval. For this to be effective, this income needs to be consistent and ongoing (with taxes paid). Banks usually look for at least a year of operation to ensure long-term viability and profitability.

**Business Loans**

Now, let's touch on business loans. Traditionally, these are heavily backed by residential property, although it may not be the most ideal approach. While getting an unsecured business loan isn't easy, there are now options available for businesses that have been trading for over 12 months.


If you have any questions or need assistance with your home ownership or business goals, don't hesitate to [book a free, no-obligation call](https://calendly.com/tella-advisors/home-loan-expert-chat?) with a Tella mortgage expert today.

In the meantime, feel free to share this post with any of the other 364,599 self-employed individuals in NZ (According to MBIE stats for March 2023).

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Self employed and looking for a home or business loan?

_**Please Note:** This newsletter was originally published on 21st July 2023. While the information presented here may still be valuable, some aspects may be outdated._
 

There still seem to be a lot of rumours about how hard it is for first home buyers to get into homes and how tough it is to get bank approval. But house prices are down, the banks really want new business and they're doing what they can to help with approvals. So just to bust a few myths, this is what we have seen approved in the last month or so:

**Back in NZ - unsure about short time on the job:**

We recently helped a young couple in their early twenties settle into their very first home after returning from working in Australia. They were aiming for Kainga Ora's 5% deposit First Home Loan so thought they needed a years worth of job history to make it happen. 

Once we tallied up their savings, KiwiSaver contributions, and First Home Grant, we realised they had enough deposit to buy the property without Kainga Ora's help. 

And guess what? If you're buying a property without Kainga Ora's assistance, there is no 'time at employment' criteria you need to meet. You just need to have an employment contract and not be in a probation period. 

We got them approved with a main bank.

From our very first conversation to applying and finally settling, it took us just 6 weeks to see them stepping into their brand new home. 

**No credit history? No problem!**

One of our youngest clients recently purchased their first property in Auckland at the age of 21. They were in their first job and had never had debt ever before, so they also didn't have any credit history, which was no problem at all!

With 10% deposit they had saved, it showed the bank that they were a diligent saver and good with managing their money. We got an approval within 4 days of our first conversation, with the property settling just a month later.

**Can't refinance because house value dropped?**

Did you know that Loan to Value Ratios, or LVR, are only applicable to new lending? Property values have dropped. But it doesn't affect your ability to refinance as much as you might think, as long as your loan amount doesn't increase. Even for investment properties with over 65% lending, you're in luck – we've had success with major banks allowing up to 85% lending.

We recently helped a client refinance their owner occupied home and investment property from a second tier lender where they had an interest rate of 11%. Because they moved to a main bank, they saw savings on interest rates immediately! 

Whatever your situation, we're here to help with your home ownership goals. [Book a free, no-obligation call](https://calendly.com/tella-advisors/home-loan-expert-chat?) with a Tella mortgage expert now.

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Busting home loan myths

The news is in … Tella has just won a Canstar Innovation Excellence Award!

This means we’ve been recognised for providing a smart way to get mortgage advice in the digital age.

The Canstar judges gave us the nod for developing technology that transforms the old-fashioned and often-traumatic process of finding a home loan into something people can do online - easily, and on their own schedule.

Ready to see how our online mortgage platform combines one-to-one advice from a mortgage expert with user-friendly technology? Go to[ tella.co.nz](https://tella.co.nz/) or book a free call with an independent mortgage expert [here](https://calendly.com/tella-advisors/home-loan-expert-chat?).

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It’s official … we’re the most innovative way to get a mortgage

_**Please Note:** This newsletter was originally published on 10th March 2023. While the information presented here may still be valuable, some aspects may be outdated._

If you’re looking to buy your first home this year, conditions are more favourable than they have been for some time. And now there’s another helping hand available in the form of the Kāinga Ora First Home Partner scheme. In this newsletter we run you through what’s involved in this new co-ownership offering.

We also assess the landscape for those already on the property ladder, because 2023 will see many of you re-fixing your home loans as current fixed terms expire.

This will likely be a shock to the system (and wallet) with rates, and therefore repayment amounts, significantly higher than they were at the start of your term. It’s crucial to make the right choice when you re-fix as you’ll be locked into higher rates for a while.

What’s the best strategy now, and for how long should you re-fix? We look at some of the options you have to manage this new interest rates environment.

**Kāinga Ora First Home Partner**

As property prices fall across the country, lenders and real estate agents are reporting more first home buyers entering the market. CoreLogic data shows that a quarter of properties sold now are to first home buyers, which is a new record.

With investors still hamstrung by a 40% deposit requirement, it’s a great time to get on the property ladder if you can.

But what if you still have a shortfall between your deposit, the amount a bank will lend you, and the price of the home you want to buy? In a situation like this, Kāinga Ora’s new First Home Partner scheme could be an option.

Designed specifically for first home buyers, the scheme operates as a shared (or co) ownership model, with you as the majority homeowner and Kāinga Ora as a third-party shared owner of a property.

**So how does it work?**

Kāinga Ora will contribute a certain amount towards the price of your property (up to a maximum of 25% or $200,000 – whichever is lower), giving them an equivalent ownership share.

So, if you have a 5% deposit for the house you want to buy, and a bank is willing to lend you 75%, Kāinga Ora would fund the remaining 20% of the property price (giving them a 20% ownership stake).

You then agree to pay that 20% back to them until you’re the sole homeowner.

You’ll be responsible for any costs associated with the purchase, such as legal and conveyancing fees, and you’re also in charge of all the ongoing property ownership costs including rates, insurances and maintenance.

Kāinga Ora won’t occupy your home, or tell you what to hang on the walls, but they will have some say as a shared owner. Keep in mind that you’ll need their approval for any major renovation projects as a guard against over-capitalising on the property.

See our new [guide](https://tella.co.nz/home-loans-mortgages/first-home-buyer/kiwisaver-first-home-grant) for more details on the eligibility criteria and finer details of the First Home Partner scheme.

**Need to re-fix this year?**

If you need to re-fix your home loan this year, you’re not alone.

The Reserve Bank says that between October last year and September 2023, nearly half of Kiwis’ home loan debt is due to be re-fixed.

With uncertainty around rising interest rates, inflation, and cost of living increases, here at Tella we’re seeing lots of questions from homeowners who want to know what’s the correct strategy when it comes to re-fixing their home loans.

Is it better to go for certainty by locking in for a longer term such as 5 years? Or fix for 1 year and take the risk that interest rates will be in a better place 12 months from now when you need to fix again?

The answer is that the correct strategy is always the one tailored to your individual circumstances. And takes your plans for the next few years into account.

Typically, a 1-year fixed rate is the cheapest rate option, but NZ’s big 4 banks are currently pricing their 2-year fixed rates lower than their 1-year offering.

This is partially to do with competition amongst lenders. They all want your home loan business and are trying to make it attractive for you to switch (and then stay). Longer term rates (3-5 years) are also being priced lower than the 12-month options.

However, with most economists predicting rates to ease again from the end of 2023, there may be higher risk to you in fixing for a longer term, than a shorter one.

An important question to consider, along with individual rates and terms is: how ready are you to ride out your future interest rate jump?

Although higher rates are going to hurt, the comforting news is that lenders already factored in any potential rate rises when they assessed your home loan application. Their modelling stress-tested your ability to service their loan at higher rates, and concluded it was achievable.

But on the flip-side of this, any money you had earmarked for other purchases or activities will now go toward servicing your home loan for the period of your new term.

Get ahead of the rise now. Crunch your household budget. Reduce as much discretionary spend as you can. Also try to clear any outstanding debt (particularly high-interest credit card debt) to ease the pressure on your pay packet.

Those homeowners who are currently paying off more than the required fortnightly or monthly amount to pay down their principal more quickly, could look at temporarily dropping it back to only the amount required. This would shrink the gap between their current and higher re-fixed loan repayments.

Compare the latest interest rates for over 20 lenders [here](https://tella.co.nz/home-loans-mortgages/rates), or to us now to get the best deal when re-fixing this year. Our experienced Home Loan Specialists are available on 0800 4 TELLA (0800 4 83552). They’re here to guide you through these interest rate rises and will structure the best home loan option for you.

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 Refix your interest rate with confidence

_**Please Note:** This video was originally published on 2nd September 2022. While the information presented here may still be valuable, some aspects may be outdated._

 

🏡 Attention NZ Resident Visa Holders: Buying Your Dream Home is Possible! 💫

Have you been told that purchasing a home on a NZ resident visa isn't possible? We're here to dispel that myth – because you CAN make your homeownership dreams a reality!

Discover how to navigate the process and secure the house you've always wanted with our simple guide.

For personalised guidance on your home loan journey, reach out to us at hello@tella.co.nz, and our friendly team will be happy to assist you every step of the way. 📧🔑

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How to buy your dream home on a New Zealand Residence Visa

_**Please Note:** This video was originally published on 7th July 2022. While the information presented here may still be valuable, some aspects may be outdated._

Why might you want to switch your home loan provider and what should you consider when doing so? In this video Ben will walk you through all you need to know and consider when refinancing your home loan.

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Make the SWITCH to improve your banking

_**Please Note:** This video was originally published on 7th June 2022. While the information presented here may still be valuable, some aspects may be outdated._

 

Before buying your first home you'll need to save for a deposit. This Tella video guide covers what you need to know before you start saving. What can you afford to spend on a home and how much the bank will lend? It covers using KiwiSaver, Kainga Ora, and loans or gifts from parents. For the first home, we always want to make our deposit go far so it's important we cover off low deposit (low equity) loans and what this means in terms of cost. Take 5 minutes to get yourself up to speed before using some of the great calculators and guides on the Tella website.

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Saving for a home loan deposit

### Lower Interest Rates

Interest rates are finally heading in the right direction after a period of steady increases. This is largely due to the Reserve Bank’s efforts to manage inflation and global economic factors influencing interest rates.

### Easier to Qualify for a Home Loan

The government has made it easier to qualify for a home loan by relaxing the Credit Contracts and Consumer Finance Act (CCCFA) regulations. This means lenders can take a more holistic view of your financial situation, increasing your chances of approval.

### What this means for you

- Lower Monthly Repayments: Enjoy more financial freedom with reduced mortgage payments.
- Increased Borrowing Power: Qualify for a larger loan to purchase your dream home or invest in your property.
- Potential to Refinance: If you have an existing mortgage, explore refinancing options to take advantage of lower interest rates.
- Faster Approval Process: Streamlined processes can lead to quicker loan approvals, saving you time and hassle.

### Understanding the Bigger Picture

To give you a better understanding of how interest rates work, it's helpful to know that banks fund their loans through a mix of deposits, equity, and wholesale debt. 

The cost of wholesale debt, measured by interest swap rates, has fallen significantly in recent months (see 1 year swap rate graph below). This is the primary driver of the decline in home loan rates.

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### Next Steps

Ready to take advantage of these positive market conditions? Book a [free, no obligations, chat](https://calendly.com/tella-advisors/chat-with-a-mortgage-expert-15min) with one of our home loan specialists today to explore your options.  

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Lower Interest Rates & Easier Approvals: Tella's here to help.

We're excited to announce the arrival of our newest member to the Tella family! 

Please join us in warmly welcoming [Jose George](https://www.linkedin.com/in/jkgeorge/) as our newest Mortgage and KiwiSaver Financial Adviser.

**Expanded Services at Tella**

Many of you know Tella as your go-to source for expert home loan advice. We're excited to share that we've expanded our services to include comprehensive KiwiSaver guidance. With Jose on board, we can now help you navigate both your home ownership and long-term savings goals.

**Meet Jose George**

Jose brings a wealth of experience to the table, having served as the General Manager of Canstar New Zealand and with a strong background in banking. His expertise will be invaluable as we continue to provide exceptional service to our customers.

**KiwiSaver Expertise**

Whether you're looking to optimise your existing KiwiSaver plan or just starting your savings journey, Jose can help you:
Choose the right KiwiSaver provider based on your goals and risk tolerance.
Develop a personalised savings strategy to maximise your future financial security.
Understand how KiwiSaver contributions can work alongside your mortgage plans.
Accredited with Milford, Pathfinder, Kernel, and Generate, Jose has the expertise to advise on a wide range of KiwiSaver options.

**Get in Touch**

Looking to discuss your home loan and KiwiSaver goals in one convenient place? Jose is here to help! Reach out to him to schedule a free, no obligations chat [here](https://calendly.com/jose-tella/chat-with-a-homeloan-kiwisaver-expert).

**Jose George**
 Mortgage and KiwiSaver Financial Adviser
 Email: jose@tella.co.nz
 Phone: 021 1405 293

Once again, a warm welcome to Jose! We're excited for him to share his knowledge and expertise with all of you. Please don't hesitate to reach out to Jose with any questions or to [schedule a meeting](https://calendly.com/jose-tella/chat-with-a-homeloan-kiwisaver-expert).

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Tella gets the Canstar treatment

_**Please Note:** This newsletter was originally published on 21st May 2024. While the information presented here may still be valuable, some aspects may be outdated._
 


**Cash Bonus for Staying Put:**

Did you know you could potentially receive a cash bonus for simply keeping your mortgage with your current bank? This could be a great way to get a better deal with your bank (and cash in your pocket!), without actually having to refinance.

While the specifics vary by bank and loan size, the banks are offering up to 0.90% of the loan amount for new customers. For existing customers, it's typically around 0.50% to 0.70%, taking into account the fact that you avoid refinancing costs like legal fees or valuations by staying put.

Here are some client examples: Last week, three of our clients received cash bonuses of $3,100, $5,000, and $7,540 for staying with their current banks.

Think of it as a thank you for your loyalty, and an incentive to stay for another 3 years!

**How It Works (The Simple Version)**

The specifics can vary depending on the bank and your loan details, but here's the general idea:
If you've had your home loan with your current bank for 3+ years and are out of the original contribution timeframe, you might be eligible for a cash payment.
The amount typically isn't as high as new customer incentives, but it can still be a significant amount of money.
Best part? You don't have to deal with refinancing costs like legal fees or valuations.
Tella Wants to Help You Find Out

There is one bank out there pre-empting and offering upfront. Others you have to ask. So if you have been loyal to your current bank for 3-4 years now with your home loan, it wouldn't hurt to ask and have some extra cash in your account at the moment.

At Tella, we believe in informed decision-making when it comes to your home loan. Whether you're a new borrower or a loyal customer looking for the best deal, we can help you navigate the options.

We're happy to do the legwork for you and help you maximise your savings!

**P.S.** Remember, bank incentives and offers can change frequently. This email provides a general overview as of 20th May, 2024.

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Want free cash to stay with your bank?

_**Please Note:** This podcast was originally published on 13th May 2024. While the information presented here may still be valuable, some aspects may be outdated._

Today's episode covers:

- **Interest rates falling:** While you're not seeing this so much in published rates, negotiated rates continue to ease off. 
- **Cash is king:** Banks are all using cash incentives to both drive new business and also to hold existing customers. We don't see this very often and it shows the competitive nature of the market we're in. Now is not the time to just roll over your fixed-rate loan.
- **Auctions vs negotiated sales:** Auctions causing pain for first-home buyers with low deposits.
- **Creative agents:** Agents are getting creative with marketing costs to close the deal and get the sale done. 

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Falling interest rates and cash incentives

**Double the Recognition for Innovation and Excellence**

Our amazing team was recognised for their dedication and innovation, bringing home two prestigious awards: Innovator of the Year and New Brokerage of the Year.  These awards validate our commitment to pushing boundaries with technology and providing exceptional service, solidifying our position as a leading player in the New Zealand mortgage industry.

**Experience the Award-Winning Difference with Tella**

Whether you're a first-time homebuyer, looking to refinance, or simply want to explore your mortgage options, Tella is here to help! We offer:
- Expert guidance every step of the way: Our team of qualified mortgage advisors provides personalised one-on-one support.
- Innovative Technology: User-friendly platform that simplifies mortgage comparison and application.
- A more empowering mortgage experience: We believe in transparency and providing you with the information you need to make informed decisions.

**Let's Make Your Homeownership Dreams a Reality**

Visit our website at [tella.co.nz](https://tella.co.nz/) or book a free consultation [here](https://calendly.com/tella-advisors/home-loan-expert-chat?) with one of our mortgage experts today! We're here to help you navigate the mortgage process with confidence.

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Double Award Winners at the NZ Mortgage Awards!