Latest / That Home Loan Hub / EQC Claims, LIM Surprises, And Getting A Mortgage In New Zealand

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EQC Claims, LIM Surprises, And Getting A Mortgage In New Zealand · That Home Loan Hub

• 0:20
  SPEAKER_00: And today we're gonna talk about various cases that people ask the good old Facebook and they come to Facebook for advice.
• 0:29
  SPEAKER_00: But I'm gonna pick them out and we're gonna talk about them and we're gonna give you professional opinion on some of those cases.
• 0:35
  SPEAKER_00: So I'm gonna read them out and I've got uh resident James.
• 0:38
  SPEAKER_00: Hello, James.
• 0:38
  SPEAKER_00: Hello that's gonna talk and assist me in that.
• 0:42
  SPEAKER_00: All right.
• 0:43
  SPEAKER_00: He has no idea what I'm about to read out.
• 0:45
  SPEAKER_01: I had to laugh when you said professional advice because it may not be professional advice.
• 0:50
  SPEAKER_00: All right, that's a really interesting one.
• 0:52
  SPEAKER_00: Listen up.
• 0:53
  SPEAKER_00: Hi everyone, I'm a first-time buyer and I need some advice.
• 0:56
  SPEAKER_00: I'm looking at a house I like, but I found out it has no floor insulation.
• 1:01
  SPEAKER_00: And they are not sure if there is wall insulation.
• 1:04
  SPEAKER_00: There is also an EQC claim that will be transferred to the buyer.
• 1:09
  SPEAKER_00: Would this be a red flag for you?
• 1:11
  SPEAKER_00: Any experience or advice would be appreciated.
• 1:14
  SPEAKER_00: Thank you.
• 1:15
  SPEAKER_00: Right, James.
• 1:16
  SPEAKER_00: So we've got a first-time buyer looking to buy a house and it's got an active earthquake claim on it.
• 1:21
  SPEAKER_00: So what should we advise?
• 1:23
  SPEAKER_01: The floor insulation is pretty easy to fix.
• 1:26
  SPEAKER_01: I know we've done that with our place, but I'm not a builder or anything like that.
• 1:29
  SPEAKER_01: You can stick some stuff under there.
• 1:33
  SPEAKER_01: I'm pretty sure we're pine cones.
• 1:36
  SPEAKER_01: Like um polystyrene or something like that.
• 1:39
  SPEAKER_00: Set them on fire.
• 1:40
  SPEAKER_00: Make an assurance claim.
• 1:42
  SPEAKER_00: Okay, so that's an easy one.
• 1:44
  SPEAKER_01: Jokes aside.
• 1:45
  SPEAKER_01: I think you can pump stuff into the wall these days.
• 1:46
  SPEAKER_01: Yeah.
• 1:47
  SPEAKER_01: You don't have to take the walls off.
• 1:48
  SPEAKER_01: Okay.
• 1:49
  SPEAKER_01: I think something like that.
• 1:50
  SPEAKER_01: I've heard that.
• 1:51
  SPEAKER_01: Uh what's the easy earthquake commission claim, if that's what it was uh it was.
• 1:56
  SPEAKER_00: Earthquake, yep.
• 1:57
  SPEAKER_01: Uh, to me, I would want to find definitely want to find out more about what's involved in that, like the details, because you don't really want things transferring to your ownership that's part of the previous part of the previous ownership, but it's hard to know without knowing the specific specifics.
• 2:17
  SPEAKER_00: Yeah, I mean, upfront, as you say, you know, could be a chance, but to be honest, as a first-home buyer, do you really want this experience for your first home?
• 2:27
  SPEAKER_00: And I always come back to when we're not sure about anything, I always say, let's ask the bank.
• 2:32
  SPEAKER_00: So normally we'd still do an application, send it off to the bank, and then see what the bank says about it.
• 2:39
  SPEAKER_00: And for this one in particular, my professional advice would be do an application to the bank, see what the bank says, find out more information about EQC.
• 2:47
  SPEAKER_00: But also, more importantly, when you get a mortgage, you actually have to get an insurance on a house.
• 2:52
  SPEAKER_00: Yeah.
• 2:53
  SPEAKER_00: And if the house has already ongoing claim, it'll be really hard to get insurance in place.
• 2:57
  SPEAKER_01: Yeah.
• 2:58
  SPEAKER_00: So without insurance, you can't get a mortgage.
• 3:00
  SPEAKER_01: Absolutely.
• 3:00
  SPEAKER_00: So my quick answer to that would be as a first-time buyer, maybe stay away from that.
• 3:04
  SPEAKER_00: For an investor, maybe a good deal, especially if you're if you know what you're doing.
• 3:08
  SPEAKER_00: Yeah.
• 3:08
  SPEAKER_01: And there's so many good opportunities out there.
• 3:10
  SPEAKER_01: Do you really, really need to take a risk with something that's a pretty that's a bit 50-50 on today's buyer's market?
• 3:17
  SPEAKER_01: Would be another way to look at it.
• 3:19
  SPEAKER_01: Um so you've got you've got time on your side.
• 3:22
  SPEAKER_00: Yeah.
• 3:22
  SPEAKER_01: Be patient.
• 3:23
  SPEAKER_00: Be patient.
• 3:24
  SPEAKER_00: Look for something else.
• 3:25
  SPEAKER_00: All right, one more.
• 3:26
  SPEAKER_00: Oh, this one is a cute one.
• 3:28
  SPEAKER_00: You should be able to answer that one.
• 3:30
  SPEAKER_00: Would love recommendations for an affordable solicitor in the Wellington region for sales and purchase agreement, applying to putting a tender.
• 3:36
  SPEAKER_00: Is$880 a pretty standard price?
• 3:40
  SPEAKER_00: So$800.80.
• 3:42
  SPEAKER_00: Is that a standard price for a lawyer?
• 3:44
  SPEAKER_01: Oh, that seems quite cheap.
• 3:45
  SPEAKER_00: Does that?
• 3:46
  SPEAKER_01: It does, yeah.
• 3:47
  SPEAKER_01: I I'm but that doesn't include the actual if you get the property right, if you get the is that just for putting in the tender.
• 3:56
  SPEAKER_00: Yeah, it sounds like just a tender.
• 3:57
  SPEAKER_01: Oh, okay.
• 3:58
  SPEAKER_01: I don't know about that.
• 3:59
  SPEAKER_00: I think that's actually more expensive.
• 4:00
  SPEAKER_00: Yeah.
• 4:01
  SPEAKER_00: So what you do want to see, and we do work with a couple of lawyers that give us a package, yeah, first-time buyer package.
• 4:07
  SPEAKER_00: So you can ask them as many questions as you like, you can put several tenders, and if you aren't successful, it's okay, as long as you buy at least one property with them.
• 4:15
  SPEAKER_00: Yeah.
• 4:16
  SPEAKER_00: And I think the top they charge is about$2,000, including Kiwi Saber withdrawal.
• 4:20
  SPEAKER_01: That's right.
• 4:20
  SPEAKER_01: Yeah, that's uh as I understand it too.
• 4:22
  SPEAKER_01: So that does seem on the pricey side if you're just putting in the tender.
• 4:26
  SPEAKER_01: Um, most of the people we deal with don't don't do that.
• 4:30
  SPEAKER_01: I don't think.
• 4:31
  SPEAKER_00: Okay, next one is an interesting one.
• 4:33
  SPEAKER_00: I don't think you would have done this, but let's have a look.
• 4:36
  SPEAKER_00: Looking for a mortgage broker that has experience with the FIFO workers, please.
• 4:42
  SPEAKER_00: Fly in, fly out.
• 4:43
  SPEAKER_01: Oh, as in they come in to do certain skilled work that in Australia.
• 4:49
  SPEAKER_00: So usually the FIFO workers would be in Australia.
• 4:51
  SPEAKER_00: So usually it's the mine workers.
• 4:53
  SPEAKER_00: Yeah.
• 4:54
  SPEAKER_00: They'll go up there, they'll work, they'll come back.
• 4:56
  SPEAKER_00: Yeah, and normally they operate on a cycle of like 10 days there and three days rest or a week rest, whatever, you know, 20 days straight work, and then they come back for a week.
• 5:06
  SPEAKER_00: Okay.
• 5:06
  SPEAKER_00: Something like that.
• 5:07
  SPEAKER_00: So, how easy it would be to get a mortgage on that sort of income?
• 5:11
  SPEAKER_01: Well, I would think that it would be okay because they would really they're making quite good money, but it just depends on the long-termness of their employment contract, I suppose.
• 5:23
  SPEAKER_00: Yeah, and it all comes down to the longevity, how long have they been doing it for?
• 5:29
  SPEAKER_00: She's saying it's first-time buyers, so I'm not sure if they mean they've got less than 20% deposit.
• 5:34
  SPEAKER_00: Yeah, but remember the key is overseas income can also be shaded.
• 5:39
  SPEAKER_00: Yeah.
• 5:39
  SPEAKER_00: So even if you're earning 200k, by the time we submitted it to the bank, exchange rates and the shading.
• 5:47
  SPEAKER_00: So we have to take away sometimes 30% of your income to present to the bank.
• 5:51
  SPEAKER_01: Yeah.
• 5:51
  SPEAKER_01: So it can be possible.
• 5:53
  SPEAKER_01: Detracks a wee bit.
• 5:54
  SPEAKER_00: Yeah, can be doable, but you just have to be aware that we can't use the full income.
• 6:00
  SPEAKER_01: Okay.
• 6:01
  SPEAKER_00: Sometimes it's shaded.
• 6:03
  SPEAKER_00: Yeah.
• 6:04
  SPEAKER_00: Awesome.
• 6:04
  SPEAKER_00: Let's have a look at another one.
• 6:09
  SPEAKER_00: All right.
• 6:10
  SPEAKER_00: Oh, I had a really cool one.
• 6:11
  SPEAKER_00: I don't know if you know, but we had this client and they were looking to buy a property.
• 6:16
  SPEAKER_00: And then the LIM report showed that the property was encroaching onto the council land and highway.
• 6:24
  SPEAKER_01: Yeah.
• 6:25
  SPEAKER_00: And the bank was originally okay with that, and insurance was okay with that.
• 6:29
  SPEAKER_00: But then the bank asked the lawyer to confirm whether that will be detrimental to the bank's interest.
• 6:35
  SPEAKER_00: And the lawyer could have responded in various ways, but the way the lawyer responded was look, there are other houses on the street that have even larger encroachment than you do.
• 6:47
  SPEAKER_00: But of course, we don't know if it's going to be detrimental to the bank or not.
• 6:52
  SPEAKER_00: And unfortunately, the bank decided to withdraw their approval for that property.
• 6:57
  SPEAKER_00: And the team was like, Oh, why is that?
• 6:58
  SPEAKER_00: You know, and I had to explain to the team that the reason for that is even though the house was there all this time and council didn't have a problem with that, or NZTA didn't have a problem with that, you just don't know what happens when the title changes.
• 7:10
  SPEAKER_00: Yeah.
• 7:10
  SPEAKER_00: And what alerts come up in the background in the system.
• 7:13
  SPEAKER_00: And what could potentially happen is NZTA may want to have some of the highway back and may come knocking on your door and may want to, you know, get the house back.
• 7:24
  SPEAKER_00: And then I was talking to someone that said, yep, they had that experience before where they had to pretty much destroy the whole house to get the land back because it was encroaching too much.
• 7:34
  SPEAKER_01: Yeah.
• 7:34
  SPEAKER_00: So super, super important.
• 7:36
  SPEAKER_00: This were first-time buyers, they didn't know much and was only alerted in the limb report.
• 7:41
  SPEAKER_00: So the real estate agent didn't pick up on it, and the lawyers didn't really pick up on it until we started asking questions around the boundary.
• 7:48
  SPEAKER_00: Because you could see clearly on the boundary, satellite images and stuff, that the house was outside of the boundary lines.
• 7:55
  SPEAKER_01: And did the clients themselves pick that up or the lawyer?
• 7:59
  SPEAKER_00: We asked them what's going on here because did you notice that, you know, part of your house, 25% of your house, is actually on someone else's land?
• 8:07
  SPEAKER_01: Okay.
• 8:08
  SPEAKER_00: And then the lawyer was like, oh yeah, cool.
• 8:10
  SPEAKER_00: And then they reviewed the limb and then they realized that, yep.
• 8:13
  SPEAKER_01: Because that's one thing that sometimes we have to remind clients about is that they order these limb reports and but then they don't read them.
• 8:19
  SPEAKER_01: No.
• 8:20
  SPEAKER_01: And they they just assume that the lawyer's gonna read them.
• 8:23
  SPEAKER_01: Yeah.
• 8:23
  SPEAKER_01: And so we we do need to make sure if they if we are gonna go to all that effort.
• 8:28
  SPEAKER_01: I think when we got our limb report, our lawyer automatically went through it, but we also went through it.
• 8:34
  SPEAKER_01: So yeah, I mean, I think it's important that your lawyer does go through it.
• 8:39
  SPEAKER_00: Yeah.
• 8:40
  SPEAKER_01: Um, because we don't know what we're looking for.
• 8:41
  SPEAKER_00: And I usually say to the clients, look, we're not gonna read your report, it's about 50 to 100 pages long.
• 8:46
  SPEAKER_00: You know, unfortunately, we just don't have the time physically, and also we're not the professionals.
• 8:51
  SPEAKER_00: We cannot give advice on that.
• 8:52
  SPEAKER_01: Yeah, and we can't we can't be held responsible.
• 8:57
  SPEAKER_01: Yeah, that's what that's the word because it's not it's like a building report.
• 9:00
  SPEAKER_01: Like I can't go into your house and say, Oh no, this house is sweet because I'm not a builder.
• 9:05
  SPEAKER_01: Um another podcast.
• 9:08
  SPEAKER_00: All right, the last one to wrap it up.
• 9:10
  SPEAKER_00: Does anyone know how to increase credit score in New Zealand if you already have a default?
• 9:16
  SPEAKER_00: Struggling to get a loan, any advice appreciated.
• 9:18
  SPEAKER_01: Okay.
• 9:19
  SPEAKER_01: I think we've we've got a few uh options here, don't we?
• 9:22
  SPEAKER_01: Um well the first thing is to, you know, know your credit score and know what you uh uh have defaulted on and make sure that that is cleared, that you're not currently in default anymore, that all those bills that that is paid off because there's no way we're ever going to be able to get you a a mortgage or any lending why that's outstanding.
• 9:42
  SPEAKER_00: So number one step, pay off the default.
• 9:45
  SPEAKER_01: Yeah.
• 9:45
  SPEAKER_01: Absolutely.
• 9:46
  SPEAKER_00: And number two.
• 9:48
  SPEAKER_01: I think what you could do is make sure that organise your affairs so everything is paid on time.
• 9:56
  SPEAKER_00: On time.
• 9:57
  SPEAKER_01: Make sure you've got the right amount of money in the right account at the right time.
• 10:00
  SPEAKER_01: Even if it's a day late, that's gonna impact your credit score and and those sort of things.
• 10:07
  SPEAKER_00: Because what people don't realise is that missing a bill here and there, even a power bill, even a telephone bill, all affects your credit score.
• 10:16
  SPEAKER_00: Absolutely does.
• 10:18
  SPEAKER_00: So you really, really, really have to be conscious of your money spending and paying bills on time.
• 10:24
  SPEAKER_01: Yep.
• 10:24
  SPEAKER_01: Make sure you've got that money in the account when it comes out because if it if it's not in there, that impacts you.
• 10:30
  SPEAKER_01: And how many times do we get found out because it you know somebody hasn't told us that they've missed payments and uh we have to explain that.
• 10:39
  SPEAKER_01: So if you have been in that situation, you know, go through it and try and figure out what happened at that time to cause you to do to to miss that payment or that the default, and provide really sound reasoning and make sure that we know about it so that we can explain it.
• 10:56
  SPEAKER_01: And this is what they want to see, right?
• 10:58
  SPEAKER_00: Thanks.
• 10:58
  SPEAKER_00: And there's another one that you can also do is clear score.
• 11:01
  SPEAKER_00: There is an app you can download onto your phone.
• 11:03
  SPEAKER_00: It's called Clear Score, and it asks you to verify yourself of who you are, and it shows you your credit check um and what score you're sitting on at the moment.
• 11:14
  SPEAKER_00: So the highest is a thousand, yeah, and the lowest is a zero.
• 11:17
  SPEAKER_00: And then um, it also got lots of different videos and tips and tricks on uh how to improve your credit score.
• 11:23
  SPEAKER_00: Yeah, and it's free.
• 11:24
  SPEAKER_01: Yeah, cool.
• 11:25
  SPEAKER_01: All right.
• 11:25
  SPEAKER_01: Um I mean, I'd love to see what my credit score is.
• 11:28
  SPEAKER_01: It wouldn't be a thousand it wouldn't be a thousand.
• 11:31
  SPEAKER_00: Let's do a deal.
• 11:32
  SPEAKER_00: At next episode, when you come back, you're gonna tell us what your credit score is.
• 11:36
  SPEAKER_00: And if it's a competition, yeah, and if it's higher than mine, I owe you a bottle.
• 11:39
  SPEAKER_00: And if it's lower than mine, you owe me a bottle.
• 11:42
  SPEAKER_00: Sweet.
• 11:42
  SPEAKER_00: Awesome.
• 11:43
  SPEAKER_00: Yep, it's on record.
• 11:44
  SPEAKER_01: I feel like I'm gonna owe you here.
• 11:47
  SPEAKER_00: That's a good one.
• 11:48
  SPEAKER_00: Well, guys, send in your questions.
• 11:50
  SPEAKER_00: If you do have any questions that you want us to cover, would love to hear from you.
• 11:53
  SPEAKER_00: Thank you so much for listening in.
• 11:55
  SPEAKER_00: See ya.