Well well well....... it's all happening!!!!
Over recent weeks we have seen some of the larger retail lenders start positioning themselves in regards to interest rates and product promotions. This has certainly created some market commentary around which is the right fixed rate option to take.
We are continuing to hear Reserve Bank comments repeated over their intention to raise OCR towards the middle of the year, and therefore it makes it more important to put together an interest rate plan for the year ahead.
For more discussion about what will suit your individual situation, please arrange a time to meet with one of our team from Wairarapa Home Loans.
To float or not to float - that is the question and one that I am being asked with increased frequency from both new old clients alike. Many of you will be basking in the interest rate heaven of a floating rate below 6%, having come off fixed rates of above 9%, but at some stage the time to fix will come…don’t leave it too late!
Most economists are now picking June onwards as the time the Reserve Bank will flex its new found muscle and raise the OCR. The number of New Zealanders on a floating rate loan (either some or all of it) is much larger than ever before and Reserve Bank policy to control inflation using the OCR has, unlike in the past, some teeth and we think they will bite soon.
So what should you do? Well please bear in mind that every situation is different and should be looked at individually by your advisor…..but here’s some general pointers.
• Long term rates should stay at, or close to, where they are at now – the stabilising global economy will see to that
• The OCR is likely to rise and short term rates (ie floating) will rise with it
• The four and five year rates seem too high, caution on using these
• The 3 year rate is up there but could provide certainty, although wouldn't suggest putting the whole loan on it
• 2 year is the benchmark rate once again and if its still around 7.2% come June, this will be a good option
• If you come off a high rate over the next few months discuss with us the option of going to floating but keeping payments the same
• Consider splitting your loan up into 3 or 4 parts with varying terms (floating, 1 yr, 2 yr and maybe 3yr). You’ll avoid the real hurt of rolling a big loan onto a high rate.
To talk through your options with one of the team at Wairarapa Home Loans then please call 0800 800 303.
How well do you understand your house and contents insurance policy? The unfortunate experience of a contact has prompted me to encourage our clients to take a look at, and understand, their house and contents insurance policy wordings.
This person was unlucky enough to find their home burgled and severely ransacked with over $20,000 of their contents stolen. The burglars also used their car to take away the stolen goods.
When they went through the claim process they were horrified to discover that her belongings were not insured because her name was not mentioned on the policy and she had to prove that she had been living with her partner for more than 3 years in a de facto relationship. The policy did state in the wordings that facto partners were only covered if they could prove they had been in that relationship for at least 3 years unless they were named on the insurance certificate. Quite clearly if they had read this small print they would have ammended the policy immediately.
Another issue to consider is if you are thinking of undergoing renovations such as new kitchen or bathroom installations you may not be aware that any damage caused by the tradesmen during the renovation, such as flooding or fire for example, would not be covered by either your house or contents policy. It is important to remember that when selecting tradesmen for your home improvements to ask them to show you a current Public Liability Insurance Certificate. If tradesmen have this insurance in place and there is some damage to your property during the renovation the costs to rectify this can be claimed from the tradesman’s policy.
If you are unsure of your policy’s terms and conditions please feel free to call HLG Insurances on 0800 800 306 and one of our advisors will be happy to assist you in ensuring you have the best policy to suit your needs.
If you are a tradesmen and do not have Public Liability Insurance or would like your policy reviewed please call HLG Insurances 0800 800 306 and we will quote with all the insurers on the market to ensure you have the best product to suit your needs with the most competitive premium available.
If you would like more information please call 0800 800 306 and one of our advisors from Wairarapa Home Loans will contact you to organise a convenient time to meet with you.
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The team at Wairarapa Home Loans look forward to assisting your referrals in 2010!
Worrying achieves nothing so do something to resolve the problem or think about something else.
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.