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What documentation do I need to apply for an investment property loan in New Zealand? · That Home Loan Hub

• 0:10
  SPEAKER_01: If you're looking to buy an investment property and you have no idea where to start, this is the episode for you.
• 0:15
  SPEAKER_01: I've got James in the house and we're going to talk about what documents do I need to apply for an investment property purchase.
• 0:22
  SPEAKER_00: All right.
• 0:23
  SPEAKER_00: Okay, you're asking me?
• 0:24
  SPEAKER_01: Yes, James.
• 0:25
  SPEAKER_01: I'm an investor.
• 0:26
  SPEAKER_00: Well, okay.
• 0:27
  SPEAKER_00: Firstly, I'd just like to say it's a pretty good time to be buy being an investor, I think.
• 0:31
  SPEAKER_01: Really?
• 0:31
  SPEAKER_01: Why is that?
• 0:32
  SPEAKER_00: Well, I just feel like the especially if you're in the if you're in the Wellington region, prices are 30, 35% off their peak of two or three years ago, interest rates are pretty low.
• 0:44
  SPEAKER_00: I mean, the Wellington region's not going to stay down and out forever.
• 0:48
  SPEAKER_00: Do you know what I mean?
• 0:49
  SPEAKER_00: So it's you know, I'm not saying go out and buy an investment property, but uh it's a good time to be looking.
• 0:55
  SPEAKER_00: But yes, in terms of documents that you would need, uh, I think you've just got to look at when you did your previous home, you're gonna need all the same stuff.
• 1:06
  SPEAKER_00: So you're gonna need your uh sale and purchase agreement signed.
• 1:09
  SPEAKER_00: Do we do pre-approvals for investment properties?
• 1:12
  SPEAKER_01: We can absolutely do pre-approvals for investment properties.
• 1:15
  SPEAKER_00: So it's the same thing that you would go through.
• 1:17
  SPEAKER_00: You need your three months' bank statements, and you would you're going to have to have uh all the same criteria ticked off that you did when you bought your previous home.
• 1:26
  SPEAKER_00: So you want your bank bank accounts nice and tidy.
• 1:29
  SPEAKER_00: You probably want to get rid of the you know the online gambling and all that kind of carry-on and the after pay and uh the zip.
• 1:36
  SPEAKER_00: I'm so surprised these days, just everybody's got the after pay and the zip, no matter how much money they're making.
• 1:44
  SPEAKER_01: I've got enough to pay.
• 1:45
  SPEAKER_01: I'm not making that much money, but I have enough to pay.
• 1:47
  SPEAKER_01: I haven't used it to be honest, it's just sitting there.
• 1:49
  SPEAKER_01: And I think I've used it like six years ago, yeah, and somehow the account is still alive.
• 1:54
  SPEAKER_00: Wow.
• 1:55
  SPEAKER_01: And I don't get charged for it, it just sits there.
• 1:56
  SPEAKER_01: And I didn't even know about it until I got an email.
• 1:59
  SPEAKER_00: So um, I've got a cross against your name in my little book.
• 2:06
  SPEAKER_00: So, yeah, so it's it's really surprising.
• 2:08
  SPEAKER_00: That's a really that's a really common thread.
• 2:11
  SPEAKER_00: And then you then you also need proof of your you know your pay.
• 2:15
  SPEAKER_00: You want to make sure if you've got uh if you're uh self-employed, you're still gonna need your two years of financial statements showing your your net profit.
• 2:23
  SPEAKER_01: And if you're halfway through the year right now, we actually need the six months that just passed.
• 2:28
  SPEAKER_00: Yeah.
• 2:28
  SPEAKER_00: Did you know that?
• 2:29
  SPEAKER_00: No, yeah, okay.
• 2:30
  SPEAKER_00: So not just so the last half year and then and the last two years.
• 2:34
  SPEAKER_00: Yep.
• 2:35
  SPEAKER_00: Oh wow, okay.
• 2:36
  SPEAKER_01: Yeah, because they want to see that look, it's been already six months into this year.
• 2:39
  SPEAKER_01: How's the business tracking?
• 2:40
  SPEAKER_01: Yeah, because you could have amazing two years prior, but right now things could not be as flash, and the bank needs to know.
• 2:48
  SPEAKER_00: Yep.
• 2:49
  SPEAKER_00: Yeah, totally understand that from the bank bank's perspective.
• 2:51
  SPEAKER_01: Like so it's a full, full, full application for an investment property.
• 2:56
  SPEAKER_01: So it's not different to first-term buyers.
• 2:58
  SPEAKER_01: The only difference, I guess, for the first-term buyers if you've got a Kiwi Saver that you're using for the deposit.
• 3:02
  SPEAKER_01: But for the investors, you might be using your home as an equity.
• 3:06
  SPEAKER_01: Yeah.
• 3:06
  SPEAKER_01: So you might not have cash saved up, or you may not have Kiwi Saver that you can use, but you may have equity.
• 3:12
  SPEAKER_01: So if you bought a house 10 years ago, your property might have doubled in value by now.
• 3:16
  SPEAKER_01: So you actually have 500k worth of equity that we can use.
• 3:20
  SPEAKER_00: And there would be quite a lot of people in that scenario right now.
• 3:22
  SPEAKER_00: If you think people from your age to my age that got in on the property thing, you know, 10 plus years ago, you've got properties that have tripled in value pretty much.
• 3:32
  SPEAKER_00: So you've got a lot of equity.
• 3:34
  SPEAKER_00: And you know, I do see a lot of people in the retired age who actually have that did the did the rentals.
• 3:42
  SPEAKER_00: I know that they don't you don't get an awesome yield out of them in terms of the income that you make, but the the capital gain over the long term is is quite phenomenal.
• 3:53
  SPEAKER_00: So it can be a bit of a retirement plan as well, in terms of it's not I think you want to have a bit of a broad range of investments rather than just property.
• 4:02
  SPEAKER_00: But uh, but yeah, so there's not too much out.
• 4:05
  SPEAKER_00: I mean, there's not too much extra that you need other than the what a first-time buyer uh would have, yeah, other than just 70% LVR or loan value ratio.
• 4:15
  SPEAKER_00: 70% LVR.
• 4:16
  SPEAKER_00: 70% loan value ratio.
• 4:17
  SPEAKER_01: So you need at least 30% deposit.
• 4:20
  SPEAKER_00: Absolutely.
• 4:20
  SPEAKER_01: Or 30% equity in your other home.
• 4:23
  SPEAKER_01: And again, for those numbers, we can actually sit down with people and work out how much available equity they have.
• 4:28
  SPEAKER_01: And for those that don't know what available equity means, I did do a webinar a couple of years ago now, it's on YouTube, but it's still relevant.
• 4:36
  SPEAKER_01: The calculations are still relevant to the today's scenarios.
• 4:40
  SPEAKER_01: So I would highly recommend for them to go and have a look.
• 4:42
  SPEAKER_01: And maybe we can embed that in a podcast to link it up.
• 4:46
  SPEAKER_01: But it's very, very important to understand that even though you already have a loan, the bank will still look at you as a brand new client to them for a new credit event.
• 4:58
  SPEAKER_01: So as you say, you have to be good.
• 5:00
  SPEAKER_01: If you've got bad credit check or if you've racked up all the different bills, you may not be a good client for a new property.
• 5:07
  SPEAKER_00: Yeah, I'm going through this with a couple of clients at the moment, and but that what makes it a little bit harder is they're uh living overseas and they're looking at uh just changing lenders, you know.
• 5:18
  SPEAKER_00: So they're having to go through the whole process, and uh one of the things that they've also had to do is even though they've had this investment property for 10 plus years in Auckland, they have need an income rental appraisal, yeah, which has been provided by I think the property manager.
• 5:34
  SPEAKER_00: Uh so just all these are there are a few extra steps, yeah.
• 5:38
  SPEAKER_01: But we can lead people through that.
• 5:40
  SPEAKER_01: So um so don't be scared if you are sitting there thinking whether you should buy property or not and what documents you need, reach out to us.
• 5:47
  SPEAKER_01: We still help clients in those situations as well.
• 5:49
  SPEAKER_01: So we're not here just for the first-home buyers, we actually deal with a range of investors, and to be honest, the bigger your portfolio gets, the more you need us on your side as a trusted advisor that will help you grow your portfolio and not just be like, okay, bank, you know, you can look after them now.
• 6:07
  SPEAKER_01: No, because the bank stuff always changes.
• 6:09
  SPEAKER_01: Yeah, like I've got clients that I've been dealing with for the last seven years, and over the time I've seen them go from first home to now tenth property.
• 6:16
  SPEAKER_01: Yeah.
• 6:16
  SPEAKER_01: And they're still with me, we're still working through different plans for them, which is really, really cool.
• 6:20
  SPEAKER_00: It must be hard for them though, if they, you know, we're in the business right.
• 6:23
  SPEAKER_00: And then, but they must see uh see a lot of changes over those over that period, you know, the their expectations of what they thought would get across the line.
• 6:33
  SPEAKER_00: You know, we've always got these changing guidelines from the lenders.
• 6:36
  SPEAKER_00: So, yeah, that's our job to make sure that the uh our our clients are prepared for those changes and that they're fully aware so that when they we do make these applications, they're not getting any shocks.
• 6:48
  SPEAKER_01: Yeah, absolutely.
• 6:49
  SPEAKER_01: Awesome, James.
• 6:50
  SPEAKER_01: Thank you so much for your time.
• 6:51
  SPEAKER_01: And if you guys have any questions or topics you want us to cover, do reach out to us.
• 6:56
  SPEAKER_01: We're here for you.
• 6:57
  SPEAKER_01: Until next time.