Equity issues under LVRs

Question from Vanessa updated on 2nd June 2016:

We have recently relocated to Marlborough and want to buy a home to live in here. (We are currently renting.) We also have a house in Auckland which is currently tenanted and sitting at 73% LVR. Our bank has denied our application for lending down here due to the new rules in place. Can someone please explain what our next steps need to be in order to buy a another home to live in? We really don't want to have to sell our property in Auckland as we have a good return on it! 

Our expert Kris Pedersen responded:

It's hard to advise without having more clarity around the numbers of your Auckland property as well as the value of the Marlborough property you want to buy.

But, at face value, it appears to me that you have two options. One option is to sell - which you say you want to avoid.

Alternatively, you could look at refinancing the Auckland property to a non-bank lender like Resimac or Liberty who are outside the RBNZ rule restrictions and who are still doing above 70% lending for properties that are investments. I can't tell from your position if this would give you enough equity to achieve what you are after but it is worth a try. 

Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz

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