The loan lowdown: September 2023

During the second half of the year, we’ve seen a large increase in advisers coming to us with new loans. This is great, as it shows the economy is picking up, even with the election in our midst.

We’ve helped a range of clients take advantage of opportunities this last month – here’s a little bit of what we’ve been seeing in September 2023:

• Construction support: We are assisting a company with the construction of a new 111sqm dwelling in Ngaio, Wellington and the refinance of an existing mortgage. The loan term is 9 months with a 58% LVR and an interest rate of 11.49% plus fee.
• Investment property purchase: We are supporting a trust with the purchase of an investment property in the Bay of Plenty. The 1970s Mount Maunganui property has three-bedrooms, one bathroom, and a double garage across two floors. The loan term is 12 months with an LVR of 65% and an 8.99% interest rate plus fee.
• Refinance: We approved a request to refinance an existing mortgage from another lender. The mortgage is for a standalone, two-level residential dwelling in New Lynn, Auckland. The property has a floor area of 192sqm, with three bedrooms, four bathrooms and a double internal garage. The loan term is 9 months with a 60% LVR and interest rate of 9.79% plus fee.

One of the things all these loans had in common is that the adviser provided us with a Statement of Position (SOP) for the borrowers in their application.

This statement contained borrowers' contact details and identifying information like dates of birth. It also contained a list of their expenses and income plus all their liabilities, such as other mortgages, loans and credit cards as well as a list of other property assets.

By reviewing their SOP we could ascertain how strong the borrower's financial position is, what assets they have behind them and how that compares to their liabilities. It also lets us know the level and type of income they have, so we can be sure they can service loan payments. This means we can be confident in the applicants as borrowers.

The Statement of Position is a key component of the application process, and it helps us qualify loans before we lend on them. This is why it’s so important one is included in an application to SCP.

If you’ve got a deal like one of the above, please don’t hesitate to reach out. We thoroughly enjoy speaking to advisers to understand the type of loans you’re working on. You can call one of our BDMs directly or you can reach us on 09 535 2239 or loans@scpartners.co.nz.