Frequently Asked Questions
What are non bank interest rates currently at?
Non Bank interest rates vary from the lower end of the scale at 6.25%, for trustee lenders, up to 12-13% for finance companies.
Can I borrow money interest only?
Yes, you can Banks will provide interest only facilities, generally limited to 2-3 years and most non bank facilities are interest only.
My Bank won’t fund my development project, are there other options?
Yes, Banks have been steadily reducing their exposure to this market over the past number of years. This space is now being filled by specialist property development financiers, trustee lenders and even High Net worth individuals.
I have purchased another house & not sold my existing house, so my Bank won’t help me, are there other options?
To get money from a Bank you have to fir into a reasonably restrictive box- certain level of equity and income, being the main 2. There are a number of non Bank funders who will provide bridging finance until you sell your existing house. They will even consider capitalising your interest payments for the period of the loan.
What level do non Bank financiers fees go to?
This depends on the transaction, however run from 0.5%-over 2.0% as a guide. Non Bank lenders look for a certain return on their investment into a deal.
I have a business and want to purchase the building I currently lease.
It is possible to use the value of your business to provide equity to assist with a property purchase. The level you can go to is determined by the asset value of your business.
What sort of loan term will non Bank lenders provide?
We have lenders who will only finance to 12 months, some 2-3 years & others up to 5 years. But there aren’t many who will go longer than that.
Is Offshore Finance available?
It is possible to borrow in a foreign currency, but generally only when you have a natural hedge (cover). Something like a business that exports and gets paid in US dollars, so can use that to service a US dollar loan. We have access to a number of offshore based funders, but they all lend and price in NZ dollars.
Can I get finance terms without providing a huge amount of information?
We are generally able to provide Indicative Terms from a short overview of a transaction.
Do I need a Registered Valuation to borrow money on my property?
We have funders who will provide mortgages against properties without the need for a Registered valuation, this is dependent on gearing, type of property and location. They will use the Council Valuation as a guide.
Can interest be built into my loan?
Yes, Interest can be added to the loan providing there is sufficient security, the term is called a capitalised interest facility.
What fees are charged?
All non-bank lenders charge a fee, this ranges from 1-3% for a 12 month term and is added to the loan, brokerage fees of 1-1.5% are also charged for arranging the funds and are also added to the loan.
What is AML?
The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 is designed to help detect and deter money laundering and terrorism financing.
Under the law all lenders in New Zealand are required to do more to verify a customer’s identity, address and financial transaction.
Refer to the Department of Internal affairs link below for further information.
Do I need independent legal advice?
In most cases yes, formal loan offers that have been signed have obligations that you are bound to, if you do not understand clearly the terms presented it is best to seek legal advice.
What is a registered valuation?
A valuation report involves a registered valuer visiting the property to assess the market value of an asset. They will conduct a full inspection of the property and look at the property’s title, council zoning maps and other comparable property sales. A registered valuation report is relied upon by Banks and non-bank lenders for security purposes and lending and should be no more than 3 months old.
Do I have to achieve all the pre-sales up front, as I should get a value lift once construction starts?
Depending on how highly you are leveraged, no. A financier will require a certain level for an initial drawdown, then further sales milestones can be met through the term.
Is it possible to raise funds for a landbank?
Yes you can raise funds to sit on land, either servicing it interest only on a monthly basis or in some cases capitalizing or prepaying the interest from the loan advance.
Can I raise money to purchase a business, without mortgage security?
Yes you can raise money against the assets of the business, being plant & equipment, debtors and a portion of goodwill.
I have bad credit, can I borrow money?
Yes it is still possible to borrow money with a poor credit rating. We can undertake a credit check & then it is best to provide an explanation around the ad-verse credit.
Can I borrow against the valuation figure, as opposed to the purchase price?
This will depend on how long ago you contracted to purchase the property and whether you can show you have added value, ie obtained a Resource Consent, leased the property etc.
My Bank has declined my application, will another Bank look at it?
It is possible to get another Bank in there, however you will need to put forward a case as to why you are looking to shift Banks, and show a good payment history.
I need to settle a purchase quickly, how long does it take?
We can get transactions turned around & settled within a v_reek, provided they are straight forward.
The best partnerships start with a meeting of minds. Contact us now to learn how we can support your investment goals with our financing services.
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