Finance & Strategy Expert
Finance & Strategy
Ask Kris Pederson, director of Kris Pederson Mortgages questions relating to Mortgages, Finance, and Strategy
Kris is a respected commentator on the property and finance markets in New Zealand and overseas. He spends his time working closely with his support team sourcing clients leading edge finance strategies.
My bank has changed their policy and no longer lends to investors for new builds. This does not suit me. I wish to discharge my owner occupied property that they hold as security, repay the minimum loan amount to meet LVR requirements on my two rental properties and explore investing with another establishment.
One of my rental properties is a recent build, a house and land package funded by the bank, and completed March 2016. But the bank rep insists that to discharge our owner occupied property we would have to meet the 60% LVR requirements for the old rental AND the new build.
I understand the new rules are being applied, but I don't see how this can apply to new builds (which are exempt under old and new LVR rules). I appreciate that we have been bitten by the 'one bank trap'. So I want some advice on how to escape and what right of appeal we have with the bank to consider our request to repay the new build at the 80% LVR level.
My first property buying experience (with two other people) ended badly and resulted in a mortgagee sale. After years of paying off debt I managed to save and use my KiwiSaver to buy a very run down two bedroom cottage five years ago.
I worked hard to do it up and rented it out after I met my now husband. This was because we purchased a bigger home in both our names which we currently live in. I sold my cottage as I had so much equity tied up with all the renovations.
So my question is: What shall we do with the money? I really want to start investing in property. Also, will I be hit with a tax bill? I did claim GST on electricity, gas and R&M.
I currently have a rental property in Gisborne which is on land sub-dividable 1HA. I purchased it using the equity in my Auckland house. I plan to subdivide the Gisborne property and build eight houses on the new sections over the next three years. I then plan to rent the new builds out, rather than sell them. To do this, I would like to get a one-off revolving loan of $400,000. What is the best way to do this? My current loans are fixed till April 2018 at the same bank.