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.
Retirement considerations
Barry asks:
We are building a house and our existing freehold house is security in the mortgage. Once completed the mortgage will be $645,000 and we are planning to rent out the old house to help service the mortgage. However, would it be better to sell the house (estimated sale value of house approx $420,000), end up with a smaller mortgage and work at paying this off?
The reason I ask is that I'm wondering how long it would take to get the mortgage down to a point where selling the old house would clear the mortgage. I'm approaching 10 years to retirement age and don't really want a mortgage in my retirement years!
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Cutting losses in Christchurch
Adam & Lisa asks:
We own a house in Auckland and we also have a new rental apartment in Christchurch. When we signed up for the Christchurch property (off the plans) we were informed the rent would be in the mid low to mid $500 per week. Now, after two years, we've had to lower the rent just to keep tenants because demand has dropped off now.
We don't mind topping up the rental mortgage a bit. However, it’s now hurting us. We are trying to ride this through but it has become a burden. As far as we know, these new apartments in central Christchurch haven't even had capital gains. We've had to take a buffer loan out so we can still top up without going into overdraft.
Should we just sell the property and make a loss (or break even if we're lucky)?
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Changing purpose
Stephanie asks:
My partner and I are looking at buying our first property soon. We have been pre-approved for a 10% deposit as owner occupiers. We will be owner occupiers for the first eight months but are considering moving cities after this and renting the property out long term.
If we do rent the property out long term, are we still able to deduct mortgage interest payments from our rental income for tax purposes - even though we were initially lent the money as "owner occupiers" at less than 40% LVR? Or is there another way of getting around this?
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