That Home Loan Hub
Welcome to That Home Loan Hub, your ultimate guide to mastering the world of home loans and property. I'm Zebunisso Alimova, here to simplify the complexities of real estate and provide you with expert insights and the latest trends.
Whether you're a first-time homebuyer, an experienced investor, or simply curious about the property market, this podcast is for you. Join me each week as we unlock the secrets to property success and help you make informed decisions. Let's dive into the world of property together!
That Home Loan Hub
Preparing for the Big Move: What Happens Between Going Unconditional and Settlement Day
From the moment your offer goes unconditional to the day you receive your keys, there's a crucial window of opportunity to make decisions that will shape your homeownership journey for years to come. This eye-opening episode pulls back the curtain on what happens after the excitement of having your offer accepted, revealing the essential steps that many first-time buyers overlook.
We dive deep into the art of structuring your mortgage to fit your unique life circumstances. Should you fix for six months or five years? How can aligning your payment cycle with your payday save your credit score? And why does paying weekly rather than monthly help you chip away at your principal faster? These seemingly small decisions can save you thousands over the life of your loan.
Perhaps most powerfully, we share personal stories about the importance of protecting your new investment with appropriate insurance. When one of us lost her father at a young age, her mother had to work three jobs while grieving because there was no financial safety net. This raw, honest conversation highlights why "relying on Give a Little pages is just not good enough" when it comes to securing your family's future.
The episode is packed with practical wisdom you won't find in typical homebuying guides: arranging utilities before you move (avoiding the cold shower on moving day!), planning your final inspection, organizing free moving boxes, and the four-box method for efficiently sorting your belongings. Whether you're weeks away from settlement or just beginning your homebuying journey, these insights will help you navigate the process with confidence and foresight.
Ready to turn your house into a home without the stress? Listen now, and don't forget to share your own settlement day stories with us online.
Hello and welcome back to the episode of Kunch Cares. Hey Kunch, hello Kia ora. So we've been so busy with you the last few weeks. We've been talking about what happens when people buy a house. We've been diving deep into every single step of the way so far. Our clients came to talk to us. They've got their pre-approval, they've got their conditional offer because they've got a house. Now in the last episode they've gone unconditional. Now what happens then?
Speaker 2:so the next step is to prepare for settlement. So there's a couple of steps in between that. So one is meeting with your advisor again to discuss your loan structure, discuss the interest rates and things like that, and also look at some protection in place. You've just committed to this big asset that you've just brought comes with this loan that you've just been approved of. So what happens if something was to happen to you? What protection have you got in place and things like that, which is a conversation that your advisor will have with you to just understand that and ensure that if something did happen to you while you're owning your house and you continue to, and for you to still be able to continue to live in that property, what sort of protection you've got in place?
Speaker 1:Yeah, exactly. So when we talk about loan structure, what we mean is you borrowed $500,000. How do you want to pay it? This is how we structure it. So in New Zealand it's the availability to fix your loan. Between six months to five years is a maximum. Certain banks came out at one point in the 10 years and that didn't work out well.
Speaker 2:I think I saw seven years at one stage as well.
Speaker 1:In other countries and I often get asked because I do deal a lot with Russian-speaking clients and it's very common in Russia and even my country I'm from Tajikistan, for those that don't know to fix your loan for 30 years, yeah, and even in America. I believe we've had a few American clients in the past and they talk about. You know what. You only need to fix for six months, one year.
Speaker 2:How does it work? How good if you had you know 299 for 30 years.
Speaker 1:How amazing would that be? But what happens in there is actually they take the interest over the 30 years and they'll lump onto your loan, so you end up paying double. You know you buy yourself a house and the bank buys a house. But in New Zealand we have amazing opportunity to pay down your loans faster by using different techniques and again we'll talk about in another episode of how to pay your loans faster and we'll demystify certain things so you don't have to pay thousands of dollars on courses that people will teach you how to repay your mortgage sooner. We actually teach our clients for free those things. So between going unconditional to settlement, we'll talk about the loan structure. We'll structure your loan according to your needs. So don't tell me that Uncle Bob told you that you need to do.
Speaker 1:X, Y, Z but those that have been following me for years, they know I always talk about Uncle Bob at the barbecues. He's the one that gives out the best advice, but may not be the relevant advice to you.
Speaker 2:The personalized advice.
Speaker 1:So this is what we do, you know, because some people might have a baby coming soon, right, and they don't want to think about refixing the loan in six months time. They may want to know exactly what they're paying until that kid goes to school. They may want to fix for five years and not worry about it.
Speaker 1:Some people may be changing jobs soon and they know they'll get a pay rise. So in order to increase their payments, they may want to only fix for one year and then, you know, increase. Some people may get a bonus in six months time, so they may want to only fix for six months and repay a lump sum onto their loan without any penalties.
Speaker 1:So there's a lot of different situations here and this is what we sit down. We talk about your goals, your future and what's coming yeah, pre-plan for it. We talk about your goals, your future and what's coming yeah, pre-plan for it. So then we talk about what the rates are. You know six months, one year, 18 months, two years, three years, four years, five years rates and we break your loan down into those parts. There is also offset facilities and floating facilities that we can talk to you about as well. So there's a lot to take in, usually in those structure meetings, and that's why normally we'll have them in between, before going unconditional, after going unconditional, but not in the first meetings, yes, not when we're doing pre-approval.
Speaker 2:There's just way too many things to cover off in the first meeting that the structure meeting comes at the end. Also, you know but in that space you think about you know do you want to pay your loan weekly, fortnightly, monthly as well? Usually it's. We align that with your pay cycle. Yeah.
Speaker 1:Yeah, because again some people don't even think about it. They go oh well, you know, just put whatever and it's like no, because if you miss your payments again it's not a good look on your credit score. You know you've got to stay as good of a client as you can because you never know in the future whether you need a top up to buy a car, whether you need to get that solar panel that we've discussed about, the 1%, the green loans, the green loans. So the bank will look at your repayment history and see how good you were and, um, so that's where we try to align it with your, with your pay cycle. But our preferred pay is weekly. If bank can do weekly, we recommend to do it weekly because that way you pay your home loan off faster.
Speaker 1:Yay, that's one of the tips um, not Not a rocket science, because interest gets calculated daily and paid out on the cycle that you're in. So the sooner you can pay down the principal, the less interest you will be paying over time. So the other thing we cover off usually with clients is insurance, so I'm also qualified to provide insurance advice and often it becomes a really nice triangle of advice. There is insurance, so I'm also qualified to provide insurance advice and often it becomes a really nice triangle of advice there, because we can do a home loan, we can do your house insurance and contents insurance, car insurance and we can also protect your life. So that's life insurance and mortgage protection, because, as Kunju mentioned, it is a huge liability that people take on Huge asset, huge liability and especially if it's a family, you know, if it's mom and dad and they've got a couple of kiddies, we don't want anything, you know, bad to happen to them, obviously.
Speaker 1:But if it does happen because, let's face it, you know, we live in New Zealand I think we all know someone that got cancer or got something bad happen to them and they have to be off work for a period of time, how are they going to pay the loans?
Speaker 2:Yeah, it's also a peace of mind, right, like you've got something there, some protection in place. Something did happen. You know that your family will be okay.
Speaker 1:Because I think relying on Give a Little pages is just not good enough. I'm really strong about that. Anyone that I talk to they know how strong I am about give a little does not provide peace of mind to your family. Raising $20,000, great, maybe for the first few months, but it's not going to dig you out of a hole if you've got a 500K mortgage.
Speaker 1:If your wife wants to grieve, if something happened to you and she wants to grieve because, look, that's what happened to me, right? That's why I'm really passionate about me happened to you and she wants to grieve because, look, that's what happened to me, right? That's why I'm really passionate about me and about people, because, in my personal life experience, my dad, passed away when he was 44 of a heart attack and my mum was 37.
Speaker 2:She was left a widow Like our age. I can't even imagine Exactly, and I'm my mum's age.
Speaker 1:Yeah, when my dad passed away and my mom was left with three kids to look after, yeah, and we had no government support back home. We had no insurances. We had a house. My mom had to work, you know, she had to go back to work straight away. She couldn't afford to actually grieve the death of my father, yeah.
Speaker 1:And for me, when I sit here and I've got ability to help people, and if I'm not using that ability, it annoys me. I'm like come on, we can do something about it. It's in our hands. So that's why I'm so passionate about insurances, because I've lived through that. I've seen what happens to families that had insurance and those that didn't have insurance. My mom had to work three jobs, wow. So that's why I'm like right, anyone that gets a home loan, you've got to have insurance as well. But even people that don't have a home loan, they have to have insurance as well. And I usually say to our young clients get it when you're young and healthy, and if you're not smoking it's even better, because it's cheaper.
Speaker 2:I know right You'd be surprised. You get a million-dollar cover and it's the same as you know. A couple of cups of coffee a week. You know like you wouldn't hesitate to buy a couple of beers over the bar and you're hesitating to protect your income or protect your family from something bad happening.
Speaker 1:Yeah, so I think this insurance episode deserves its own episode, 100% yeah exactly Because I think we all understand the risk, but people just it's amazing like they will get a home loan but they'll hesitate about insurances. Yeah, and it's like it's an expense. They see it as an expense, not an investment into the future. Yeah, because, yeah, you just never know what's around the corner. Right, and just this year alone, we had so many cases that we've come across and for those that are listening, you've probably seen it on the media as well.
Speaker 2:You know people dying young people dying, yeah, unexpectedly, unexpectedly, accidentally, and then you know, the wife is left with the mortgage.
Speaker 1:Yeah, and ACC does not pay. Guys like don't be.
Speaker 2:Fooled.
Speaker 1:Yeah, don't be fooled, don't be in a mindset of that ACC will be paying for the rest of their life. No, they will pay a lump sum, but it's not much, not much at all. So you can see how passionate I get about this topic.
Speaker 2:You can see our fire. I think we're like oh see the man, we've deviated.
Speaker 1:So back to the recap Before settlement, once you go unconditional, we talk about the structure of your loan, we talk about what sort of insurances you need to have in place before settlement day, and one of the other things that people often ask me about is at what stage do they transfer the rest of the deposit? So let's say, if you had some cash on hand as well and the bank is giving you the rest, that cash has to be transferred to your lawyer, because on the settlement day they will take all the money, all the funds, from one pot one spot, one spot and transfer to another pot and another spot. They'll transfer it across to the vendor solicitor and that's when the vendor solicitor will say we've received the money, it's all good, give them the keys, and that's where the agent will get the keys and pass on the keys and probably a basket of goods I don't know, some wine, some wine get your keys.
Speaker 1:That's the fun part, that's the fun part. So, and also what we say between unconditional and settlement, start packing. Start packing, start arranging your utilities. Think ahead. One of the recent cases we've had, which was really interesting before settlement, clients didn't realize the property was run on gas and they needed to order gas bottles.
Speaker 1:Oh bottles on the bottles, yeah, yeah, the gas bottles. And what happened was on settlement day they arrived at the property and they realized there's no gas, there's no hot showers to be taken. You know, after moving all day, they're all sweaty, they want a hot shower and they can't do that because they haven't realized they needed to arrange. So that's something for people to think ahead, because the gas bottles get taken away. So if the vendor cancels their contract, the company actually comes and takes away the gas bottles.
Speaker 1:Oh yeah, and you're left with no hot water if your hot water runs off gas.
Speaker 2:Damn.
Speaker 1:Okay yeah, Get your utilities sorted people, yeah, and same as the internet. Like, we've got a lot of people that we deal with that are self-employed, for instance, and I just remember myself when I was moving and I had no internet for a day or two. You know it affects your business functioning right. So if you are reliant on the internet especially if you've got, you know, kids that you need to entertain for at least half an hour while you're putting away those dishes make sure again, yeah, your internet is sorted, your power is sorted, so things like this. Before the settlement so you can contact all those companies and arrange the future date, because you already know your settlement date.
Speaker 2:You already know that future date, the day you're going to move, so set it all up for that settlement date.
Speaker 1:And the other tip I usually share with my clients is if they're renting, have your rent extended for another week, so then you've got a whole week to move your stuff. So you're not doing it all in one day like a crazy person, especially if you're moving in the same town. Like if you're moving in the same town you know you could allow that week of moving back and forth. Obviously, if you're moving islands or from you know different cities, then it's a different thing, because then you may arrange a truck, yeah a mover or something.
Speaker 1:Yeah a moving truck. So just think about all those things ahead of time, before settlement, because it's so easy to be swept away in all sorts of different.
Speaker 2:Yeah, those are some really good tips, because I myself didn't even think about, you know, utilities and stuff like that. It's just like oh, settlement, yay, yeah, exactly, get your utilities sorted as well.
Speaker 1:Yeah, exactly, because on the day you'll get the keys you'll walk in. You'll probably the day before actually, you will have probably another pre-inspection, the final inspection, and this is for you to double check. You know whether the toilets are flushing, whether the water.
Speaker 2:Whether the oven's clean or not.
Speaker 1:Yeah, you know things like this, because if there's anything that's not up to the standard of yours, you can actually approach the lawyer and you can ask them to withhold some funds.
Speaker 1:For instance, we had an instance when we were buying a house, we were going to move in and the vendor left a whole garage of stuff. They just left all of it behind and they said, oh, it's rubbish, we don't care about it. So we managed to keep, you know, a couple of hundreds back. I mean we took 10 years ago, so back then it was like $500 for a tip, you know. So then the tip, we could arrange a tip to come in and get rid of all of this. So things like this that you can actually voice, and also the cleaning standards, you know, if it's not up to your cleaning standard, again you can voice that with the agent, raise it with your lawyer, et cetera. So that's pre-settlement inspection and then on the settlement you get the keys, you pop the bubbles. Hopefully you have lots of fun moving, arrange your friends as well well ahead of settlement.
Speaker 2:Have a moving party. They can all come and help.
Speaker 1:Yeah, exactly, we've done that so many times. I think I've moved like 10 times in the last 12 years no-transcript. So the lift goes up and down for the furniture so you don't have to like strain your back to put furniture.
Speaker 2:So many tips.
Speaker 1:So many tips. You can tell I've moved many times Conch. What's your tip? Share something, Come on.
Speaker 2:Get moving boxes ready. Actually, Like a lot of people, Banana boxes, no, the what is it called? The my Food Bag boxes, HelloFresh, HelloFresh boxes. They're perfect actually. Yeah, Again, Put it on the social media. You know your community page. Who's got boxes? And you'll be surprised.
Speaker 1:And bubble wrap.
Speaker 2:And bubble wrap.
Speaker 1:Don't buy it. It costs a lot of money and you'll be surprised. And bubble wrap, and bubble wrap. Don't buy it. It costs a lot of money. A lot of people actually want to get rid of it, absolutely.
Speaker 2:Put it on a community page who's got boxes?
Speaker 1:There you go we're all about saving money here and the environment and the environment. So yeah, recycle, reuse, have garage sales as well. You know if you can Raise some money you don't need in a new house yeah. Have some garage sales get rid of stuff. Yep, so we always had three boxes going. Every time we moved was to keep, to donate, to sell Four and then to throw away. Yeah, so there were four boxes and that helped tremendously. Yeah, so between unconditional and settlement, this is our top tips.
Speaker 2:Yeah, I think we even moved into moving in Settlement and then moved in.
Speaker 1:So, yay, congratulations, congratulations you bought a house and you're moving in officially a homeowner in the next episode we will cover off what happens after the settlement and we'll talk more about that. Stay tuned. Thanks everyone, bye.