We have been hearing for a number of months that there is the likelyhood of interest rates on the rise and this week we hare started to see exactly that. The Reserve Bank of New Zealand held the Offical Cash Rate this time but continued to signal that increases could be expected later this year. Many New Zealanders are in a holding patern and enjoying the low floating interest rates that has assisted many to reduce their payments in tough times or work on paying back their loan at a faster rate.

One of the critical things you need to be aware of is when your fixed rate is nearing its review point or you have a major portion of your debt on floating rate then there is a risk that when you decide to lock in your fixed rate you may find rates have substantially increased. This can have the effect of making the household budget tight or paying more interest cost than you need to.

Please be aware that rates are on the rise and now may be a good time to meet up and discuss your individual situation, please arrange a time to meet with one of our team from Manawatu Home Loans.

Following our very successful seminar on Residential property, we thought we should share with you some tips we gained about purchasing a property at Auction:

• Ensure you have your finance pre approved, and that the lender is comfortable with the property you are looking to buy at Auction.
• Register your interest with the Licensed Real Estate Agent selling the property.
• Give yourself plenty of time if you want to arrange Builders Inspection, LIM, Valuation – due diligence on the property.
• Involve your Solicitor early on in the process, they will advise on the Auction contract terms, title of the property such as cross lease, unit title etc
• Ensure you have available Deposit usually 10% (we can arrange this for you with your lender)
• Go to a couple of Auctions to get the feel of it and get a bit of confidence
• You can have a licensed real estate person bid for you.
• Have someone with you to keep a track of the bids.
• Be very clear about what your price/budget is; don’t let emotion get the better of you.

Please speak to one of the team at Manawatu Home Loans about working through your home loan if you are thinking about purchasing at an auction. We can meet at a time and place that is suitable to you.

From 1st July 2010 there will be a change in the way Life Insurances companies are taxed which will have an impact on the cost of premiums. At this stage the premium increase has not been confirmed although indications are that this could be up to 25%

It is important that you are aware of these changes and how they may impact on you now and in the future. We have summarised the changes below:

• The taxation change applies to all Life Insurance policies taken out after the 1st of July 2010.
• Existing Life Insurance Policies taken out before 1st July 2010 are exempt from this tax change for a period of up to 5 years
• The taxation change applies to Life Insurance products only
• Level premium Life Insurances policies will not be affected by the taxation change

As you can see the good news is that your existing Life Insurance policy will not be affected and as any increases to your Life Insurance benefit that complete before 1st July 2010 will be exempt from this extra charge, now is the time to consider increasing your Life Insurance Cover.

You could also consider restructuring your insurance so that all or part of your insurance is on a level premium basis which would avoid those annual premium increases as you get older.

If you would like more information please call 0800 800 306 and one of our advisors from Manawatu Home Loans will contact you to organise a convenient time to meet with you.

Go to our website anytime to see the latest update in interest rates! As well there is an abundance of information on:

1. buying a home

2. loan structure

3. refinancing your loan

4. first home buyers

5. investment property purchase

6. building a home

You will also find out more about our team, who we are, and our disclosure documents...just remember www.home-loans.co.nz to refer your friends and family to us too... our team at Manawatu Home Loans would be happy to help! Go to www.home-loans.co.nz

If our reality equals our perception, we can alter our reality by altering our perception - that is, the way we think about something.

Written by Kate Marr-Kippenberger - writer of the daily column, Soul Food, for The Press. Soul Food has been published in book form internationally and was a best seller in NZ. Please go to www.onlinesoulfood.com for more information.