Organizing our finances

To buy a property, obviously you need to finance it. In New Zealand, the national sport (after Rugby and Barbecue) is buying and selling properties… Considering the competition between banks out there to sell you mortgages – the rat race starts on all walls and shop windows with a shower of rates to make you dizzy – we thought it would be easy. We would just have to push the door of our bank and we would come out with money and a good rate! We both have a decent salary and I have a long lasting business relationship with my bank. We vaguely heard that brokers could help you out, out there, but why would you pay for an extra commission for what we should get directly? The only thing you need is to stand your ground and get the best rate.

Well, hum… we discovered that it’s a bit more complicated than what we thought. To start with, when you are a business customer with ASB, all your inquiries will be dealt with by the Business Unit, even if it is a personal matter…and they are not too keen on giving you money for a property outside Auckland! “you mean, just land covered in bush, 2 hours from Auckland, with no house on top?”…”a gravel road to get there?” (at this stage, we barely avoided a collapse of our account manager). After this failed first meeting, a discussion with the National Manager and the meeting with another business account manager, no progress was made. They would exceptionally lend 60% for the purchase of the land and would require inspections before giving more for the house to be built. Thanks, but no.

That is when I thought it would be a good idea to see what a broker could do for us. After a call to a friend in the industry, I get a meeting with John – funny enough lived many years in France. With him, the whole world of mortgage and finance strategy unfolds. Nothing that the bank ever explained to me! They had never looked at my available funds, my goals in short and mid-terms or any solution for me… John looked at all that and we planned on a strategy that would save us fees the first year while we are building, with a floating rate account, that will eventually be fixed in the future, when the house is completed.

We discovered that the story is not only about getting the best rate available, but getting a strategy that works for you with your assets and goals, which banks don’t seem to provide, or at least mine. Also, it is also very good to get somebody to answer your questions and look after issues if they arise with the bank. `