How 'Easy' is it to get Money at the Moment
In what is close to the perfect storm for our business, money is the cheapest it has ever been, but it has also never been so hard to access.
The services of a quality Mortgage Advisor has never been so sought after. Our state of the art technology has enabled us to trade through the COVID-19 period and while our banking partners have been hard to access, even in level two, we have seen volumes return right back to pre-COVID levels.
Banks are currently in a very conservative mindset, preparing themselves for the potential wave of losses that could occur as a result of the wage subsidy and mortgage payment deferment initiatives.
In conjunction to conservative LVR's, the banks are also assessing client's ability to meet their loan repayments at a heightened debt servicing test rate. What is a debt servicing rate? This is the interest rate banks assess client's loan affordability against. While we are seeing record low interest rates, banks are still assessing client's payment ability on interest rates anywhere between 6.65% and 7.00%. This makes a huge difference on how much money a client can borrow.
This just shows how conservative banks are being in this time.
It is also worth remembering that we deal with a range of 'non-bank' mortgage lenders, that don't hold a banking license but process millions of dollars in mortgages each month. Some of these are at very competitive interest rates that are less than 0.5% above those of the banks rates, but they use debt servicing rates as low as 5.75%, so again this make a massive difference in how much a client can borrow.
When money is difficult to access, Mortgage Advisors are a necessity and with access to New Zealand's widest range of Banks and Lenders, now is the time to reach out to us with any of your clients that need assistance.