If you are planning to buy a new home soon and you have some debts then you might want to talk about your debts with an expert.
One of the big challenges for first home buyers is the amount of debt and financial commitments that they have. These days it’s quite common for people to have loans, whereas 20 or 30 years ago it was not such a thing.
People will leave university with a student loan, leave school, get a car and put that on a higher purchase, do some travel and that goes on a credit card, buy the new television on interest-free terms. There are so many options for getting into debt and it’s almost become a habit for many young Kiwis.
While you’re earning good money and do not have a mortgage, then debt does not seem to be an issue. But at some point it has to be paid back regardless whether it’s interest-free or interest-bearing debt that you have. Also those repayments need to be factored in when you’re applying for a home loan.
It’s not always easy to get a home loan, but it is certainly harder if you have a number of other debts and financial commitments to pay. So we know we can’t change the history, but we do need to draw a line in the sand and work out how we’re going to deal with the challenges of these debts and financial commitments.
The first thing we need to do is establish what they all are, what the loan balances are and the repayments and the interest rates of all of the debts. Then we need to have a strategy to work out what debts are going to be the most efficient to pay off quickest or first.
Now you may think it’s logical that you pay off the highest interest rate debt first, but if you’re trying to apply for a mortgage, the real focus has to be on reducing the total amount of your repayments. So it could be that you actually pay off an interest-free loan before you pay off an interest-bearing loan. That may defy logic from a financial sense, but you’ve got to remember what the goal is.
The other thing that we will often do to help people get into a first home loan is to consolidate the debts to bring the repayment down. And that may even include consolidating an interest-free student loan into an interest-bearing loan, remembering again that it’s actually the key is to get the debt repayment as low as possible.
Why is a debt repayment so important? Because that is what is removed from your income before they assess your affordability for a mortgage. For example, if you had $1,000 coming into the bank and $400 was going out on paying debts, then that only leaves $600 to pay for your living costs and your mortgage. And the banks may deem that that is not enough.
If you are planning to buy a new home soon and you have some debts then you might want to talk about your debts with an expert.
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James Puah
Mortgage Manager (Adviser)
As a financial and mortgage advisor, James Puah is here to help you to achieve your financial security and freedom through a tailored strategy to best suit your interests, aspirations and needs. Whether you are buying your first home, a new build, an investment property, looking to re-finance or re-fixing your mortgage, or if you are simply consolidating debt, require commercial lending, business lending, development fund, car loan, insurances, KiwiSaver and/or investments etc, James would love to hear from you and provide an optimum solution to cater to your requirements. James is passionate about finding out more about your financial aspirations and goals so that he can help you head in the right direction. James is multilingual; he is fluent in English, Mandarin and Taiwanese Hokkien.
Stuart Wills
Mortgage Manager (Senior Adviser)
Stuart is based from offices in Hobsonville in Auckland and is known as a comprehensive mortgage adviser who has in-depth knowledge in helping people buy their first homes, helping self-employed people to get a home loan and other finance, help people with new build finance and helping those people that need non-bank finance. Don’t worry if you are not in Auckland as Stuart will work with people throughout New Zealand and overseas too.
Jesica Muliawan
Mortgage Manager (Adviser)
Jesica is a dedicated mortgage adviser with a passion for people and property, committed to helping people navigate the home loan process with confidence. She believes property ownership is a powerful pathway to financial freedom and works closely with her clients to help them build long-term wealth. With a strong background in construction, finance and property, she understands the challenges of securing the right mortgage and ensures her clients receive expert guidance every step of the way.
Nicola Petersen
Mortgage Manager (Adviser)
Nicola has over 20-years experience with property and she believes that getting the home loan approved and set up properly is as important as finding the right home. She loves helping first home buyers, guiding them through all aspects of getting ready to buy, getting the finance pre-approval and of course helping finalise the finance that is required. When she’s not helping first/next-home buyers and investors secure the best home loan deals, she likes to explore the many beaches of Auckland’s Hibiscus Coast and North Shore with her husband and two kids.
Yatin Kainth
Mortgage Manager (Adviser)
Yatin is a dynamic professional who works as a Mortgage Advisor at Mortgage Managers. He is dedicated to providing exceptional support and guidance to his clients, ensuring a seamless and efficient process for getting the home loans approved and then the ongoing management of the loans.
Sunil Kumar
Mortgage Manager (Adviser)
Sunil is a mortgage adviser with experience with first home buyers and existing home owners, but also with extra specialities for helping people that also have income from rideshare platforms and for property investors including arranging finance for boarding houses. He is able to understand and assist a wide range of people in different situations by providing the most ideal mortgage approach. Speaking fluent English, Hindi, Haryanvi, Punjabi and Fijian, Don’t worry if you are not in Auckland as he will work with people throughout New Zealand and overseas as well.
