GRA Blogs

Articles by Kris Pedersen

Kris Pedersen

How to get finance that exceeds the LVR rules legally

For a while it appeared that the introduction of the 60% LVR rule for investors would make the property market easier for first home buyers. However, as per this article in the Herald and these statistics from the Reserve Bank, first home buyers are finding it difficult as well.

The 60% LVR rules have certainly made it much harder for investors, with lending sitting at around 50% of the levels from 12 months ago. Through increased client enquires in our business, speaking at events like Gilligan Rowe’s Property School (which continues to sell out every month), and general interest elsewhere, we have been seeing that demand for investment funding is still there; it is more the availability of credit that is causing issues.

While we would generally always recommend banks as a first port of call, for those of you who are finding the current restraints hard to get around, it may be worth looking at non-bank options.

At this stage, the options I mention below will mainly assist relatively new investors who:
•are looking to purchase anywhere between their first and third investment property 
•have strong servicing 
•are finding the required equity levels to be the challenge.

There are three non-bank options where it is still possible to get funding up to 80% LVR for investment purposes. Each lender has their own idiosyncrasies such as:

•One will not lend in Auckland or Hamilton and requires borrowing in personal names – we can work alongside GRA to still make this work for you. (They have structures that help you manage this arrangement which are very investment and tax savvy.)•Another will do standard rates up to 70% but will use a combination loan to take funding up to 80%. The second portion is more expensive but the numbers can be made to work if you purchase well or are creating a good level of equity through renovations.
•The third requires you to also hold your owner-occupied property with them to fund investment lending to 80%. This is normally not what GRA or Kris Pedersen Mortgages would recommend but we can discuss with you what your likely risks are and it may still be a workable option for some people.

If you are wanting to invest and are finding that lack of equity is holding you back, we are very experienced in this part of the market. For a no-obligation chat please click on this link, fill out the form, and we will be in touch.

Kris Pedersen
Kris Pedersen
Kris Pedersen Mortgages
© Gilligan Rowe & Associates LP

Did you like this article? Subscribe to our newsletter to receive tips, updates and useful information to help you protect your assets and grow your net worth. We're expert accountants providing expert advice to clients in NZ and around the world.

Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.
To whom it may concern: The Corporate Trustee team at Gilligan Rowe and Associates have been our Professional Trustee for our family trust and trading trust since May 2005. From the initial advice during the designing and creation of our trust structures through to the day to day operation of the entities, the support and guidance we have had from the Corporate Trustee team has been second to none. As a business owner and operator, I need to have reliable, efficient, proactive and knowledgeable people as part of our business team and Gilligan Rowe and Associates Trustee services tick the boxes in all of these criteria. I have no hesitation in commending and recommending Gilligan Rowe and Associates Trustee Services team to anyone who requires professional and competent guidance in the safe operation of their trust and in turn secure protection of their assets. - RNT

Would you like to receive . .

. . tips, updates and useful information to help
protect your assets and grow your net worth?

Property 101by

Investing in residential property?

Put this at the top of your reading list.

If you're investing in residential property, seeking to maximise your ability to succeed and minimise risk, then this is a 'must read'.

Matthew Gilligan provides a fresh look at residential property investment from an experienced investor’s viewpoint. Written in easy to understand language and including many case studies, Matthew explains the ins and outs of successful property investment.

  • How to find the right property
  • How to negotiate successfully.
  • Renovation do's & don'ts.
  • Property management.
  • Case studies and examples.
  • and much, much more..