NZ 1st homebuyers are ScReWeD...

[Dr_Who]

OK, I will reword..

Dr Who, are you saying you are buying properties at 40% discount to market value?

Next time a finance company in receivership auctions their property portfolio, go have a look, you will be very surprise.

[ritchie]

george.

Also in same boat....on 5/11 I made enquiries re breaking a fixed term to lock in the 6.99% rate....It was going to cost $1700.00.

Made enquiries 2 days ago...to break the same mortgage to get the 6.99% rate was now going to cost $5000.00.

I am fixed at 8.89% for a year which expires in september.

[Sideshow Bob]

George I think we touched before with this subject as we're with BNZ also. We went from fixed to floating a week or two back, originally on a 4 year deal at 8.99%, and only 3 years into it. It cost about 1% of the mortgage value to change, but we'll save that in less than a year with the prospect of more to come.

It also allows us to offset interest cost with total money also, allowing for any funds on deposit.


SSB

[George]

Worked out that even with the fee added to the mortgage, we would be about
12,000 better off after the 3 years, assuming 6.5% compared to our 8.3.
Will check on Monday what happens after 6 months and/or if the same deal
can apply to a longer term.
The shrewd one must be chuckling at our dilemmas. To be honest, I would also be
hesitant about buying at the moment, but also working my butt off to save
the deposit and hoping prices didn't get away on me.
Am looking at a printout of the economic wheel - will post details here soon.
George

[George]

The economic clock from the top (approximate)
12 Sharemarket peak
1 Rising property values
2 High interest rates
3 Falling commodities and share prices
4 Falling overseas reserves and rents
5 Harder to obtain finance
6 Falling property prices
7 Low/falling interest rates
8 Higher unemployment
9 Rising share and commodity prices
10 Rising overseas reserves and rents
11 Easier finances
then back to our sharemarket peak

According to this we are at about 7-8 o'clock with possible more
unemployment to come then a rising sharemarket - but this could be
months or years away. Don't know if that helps in timing the markets
or not.
George

[Yossarian]

George, ritchie - count yourselves lucky. I was talking to my step brother in the weekend and he is staring down the barrel of a $13k charge for breaking a 2 year mortgage, fixed at the height of the market (9.7% ish, in April I think)!!! Yikes.

[Yossarian]

The economic clock from the top (approximate)
12 Sharemarket peak
1 Rising property values
2 High interest rates
3 Falling commodities and share prices
4 Falling overseas reserves and rents
5 Harder to obtain finance
6 Falling property prices
7 Low/falling interest rates
8 Higher unemployment
9 Rising share and commodity prices
10 Rising overseas reserves and rents
11 Easier finances
then back to our sharemarket peak

Interesting - I don't think the relationship between each 'hour' and the way this plays out in the real world is necessarily linear. E.g. some hours take weeks, some hours might take years!

Also (obviously) lots of hours are happening at the same time.

[fungus pudding]

George, ritchie - count yourselves lucky. I was talking to my step brother in the weekend and he is staring down the barrel of a $13k charge for breaking a 2 year mortgage, fixed at the height of the market (9.7% ish, in April I think)!!! Yikes.

Why yikes? He entered the contract willingly - with no gun at his head. And he doesn't have to break it and won't break it unless he will come out winning. He should be grateful the contract has a buy-out option.

[Yossarian]

are you a robot?

[GTM 3442]

Why yikes? He entered the contract willingly - with no gun at his head. And he doesn't have to break it and won't break it unless he will come out winning. He should be grateful the contract has a buy-out option.

This would imply that the loan amount was all fixed, not split between fixed and capped/floating.

The hard part is to work out which proportion of a loan is fixed.