Alex Zhao

Alex Zhao Financial Advisor at Prosperity Finance - Specialize in Residential/Commercial/Business Lending.

I am accredited by the following lenders and additional private fund providers. ANZ, ASB, BNZ, Westpac, Kiwibank, TSB, SBS, The Co-operative Bank, Bank of China, ICBC, CCB, Heartland Bank. Avanti Finance, Select Home Loan/Bluestone, Pepper Money, RESIMAC, General Finance, Liberty Financial Limited, Southern Cross, ASAP Finance Limited, Cressida Capital, DBR, First Mortgage Trust, Basecorp Finance, Unity, CFML, Pallas Capital, BIZCAP.

Westpac reduced their home loan assessment rate back to 8.9% today. A welcoming change but still higher than ASB, BNZ, a...
10/08/2023

Westpac reduced their home loan assessment rate back to 8.9% today. A welcoming change but still higher than ASB, BNZ, and KIWIBANK.

18/07/2023

Home loan interest rates increased again across major lenders, but test rate remain unchanged. We also see certain lender adjusting their boarder income cap, which is a positive sign and may result in higher approval amount.

First home buyers – what are your options if you did not have 20% deposit?Saving up 20% of purchase price for your first...
04/07/2023

First home buyers – what are your options if you did not have 20% deposit?
Saving up 20% of purchase price for your first home is really hard, but there are multiple options available to let you get on to the property ladder for as low as 5% deposit. Let’s find out which one suits your situation.
Option 1: First Home Loan (FHL)
This is a Kainga Ora backed loan product that allow you to borrow up to 95% of the house value under the right circumstances. To be eligible, generally you need to have NZ residency, earn below the annual income cap for the past 12 months, and meet employment requirement. More details can be found in the following link.
First Home Loan :: Kāinga Ora – Homes and Communities (kaingaora.govt.nz)
This is the most recommended option as you can have discounted interest rate without low equity premium/margin added.
Good things about FHL:
• Can borrow up to 95% of LVR
• Normal discounted interest rates are usually offered by banks
Downsides of using FHL:
• Limited lender selection
• There is a 0.5% Low Equity Insurance Charge
• Registered valuation is compulsory
• Slow process as each application needs to be assessed by both the bank and Kainga Ora

Option 2: First Home Partner (FHP)
This is also backed by the government via Kainga Ora. Basically, the government is giving cash to let you have up to 25% deposit (they will contribute $200,000 max). In return, the government own the property together with you. You need to fully buy out government’s share in 25 years. Eligibility criteria for FHP is less strict when comparing to FHL, and you can find more information about this offer in the following website.
First Home Partner :: Kāinga Ora – Homes and Communities (kaingaora.govt.nz)
Good things about FHP:
• Government can contribute up to 25% of purchase price or $200,000 (whichever is lower)
• Eligibility requirements not as restrictive as FHL
Downsides of using FHP:
• Limited lender selection
• Government is owning a share of the property with you, which mean you may need to pay back more than what the contributed if house value increase in the future.
• Need to lodge applications to both Kainga Ora and Bank

Option 3: Standard High LVR loans
If none of the above options suits, you can also look into standard high LVR home loans. This option allows you to borrow up to 90% of house value. However, due to RBNZ speed limit rules, each bank’s quota for this type of loan is very limited and highly dependent on the number of under 80% loans they’ve written in the past month. Generally, you can only go to your own bank for this option, and the approval amount is normally much less than if you were applying for a standard home loan with LVR no higher than 80%.

Good things about Standard High LVR loans:
• It gives people who are not eligible for FHL and FHP an alternative option.
• Much less restrictions in terms of eligibility criteria when comparing to FHL and FHP.
Downsides of using Standard High LVR loans:
• High interest rate. Non discounted interest rates are offered and a margin is normally added on top. This could make interest rate 1-1.5% higher.
• Very high income-threshold for loan approval. Loan amount approved could be significantly less comparing to below 80% loan applications when the same income figure.
• Limited bank selection as you normally can only go to your own bank

So, if you are looking for a high LVR home loan option, it is recommended to check out FHL first, then Standard High LVR loans, and leave FHP as your last resort just to avoid the risk of having to repay more than the initial contribution to the government in the future.

First home buyers - not all First Home Loans are created equal.First Home Loan (FHL) is an excellent product for eligibl...
29/06/2023

First home buyers - not all First Home Loans are created equal.

First Home Loan (FHL) is an excellent product for eligible first home buyers, who do not have 20% deposit. Applicants get no interest margin added to their home rates, and banks even provide small amount of cashback most of the time. With the latest drop in the Low Equity Insurance charge from 1% to 0.5%, applicants also get a small increase in their borrowing capacity. However, it is not widely known that each FHL issuing bank uses their own set of assessment rules to determine how much an applicant can borrow, and the same person may get significantly different approval amount from each bank. Generally, the following aspects are key factors affecting one’s max borrowing capacity during a FHL application:

• Test rate the bank is using – higher the test rate, lower the approval amount. Each bank set this rate independently with their view of what’s a safe threshold to ensure their lending is responsible.

• How income cap is implemented – FHL has a government set income cap of $95,000 for single application with our dependent child, or $150,000 for couple/single with dependent child. However, we see banks take drastically different approach when determining what income they should use for the loan amount calculation. Some uses a hardline $950,000/$150,000 income cap, but there are also banks willing to use higher figures provided applicant’s past 12 months income was below the threshold.

• How many boarder incomes you can propose and what are the income cap & discounting rules. – some banks allow 1 while others allow 2 boarder incomes proposed for applicant’s new home.

Overall, it is not that straight forward to determine which bank provides the best FHL solution to first home buyers, and each applicant’s situation need to be carefully reviewed before choosing the appropriate lender.

With further amendment to the CCCFA in June 2023, there is now one major bank lender started taking more reasonable appr...
24/06/2023

With further amendment to the CCCFA in June 2023, there is now one major bank lender started taking more reasonable approach on assessing applicant’s living expenses. Auto-generated benchmark monthly-expense figure is no longer the hardline minimum that the bank need to use, so you may borrow more if your average monthly living expenses were lower than the benchmark number.

Address

112C Bush Road, Rosedale
Auckland
0632

Opening Hours

Monday 9am - 5:30pm
Tuesday 9am - 5:30pm
Wednesday 9am - 5:30pm
Thursday 9am - 5:30pm
Friday 9am - 5:30pm

Telephone

+6499308999

Website

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