SOA Shortcuts
Reasons for picking a certain interest rate
Long fix
I have recommended fixing the loan for XXX years at XXX%. This will give repayment certainty over a longer period. Please be aware that if interest rates drop, then there may be break fees to break the loan and refix over a lower rate. Although we may review from time to time, he intention should be that you will remain on this interest rate until the fixed period ends.
Short fix because of sale/refi soon
I have recommended fixing for a period of xxx year at xx%. The reason for this, is that you have told me that you are looking to sell/refinance within the short term, and this will mean that you are not tied into a longer period.
Short fix because of client choice
I have recommended fixing for a longer period of xxx year at xx%. The reason for this, is that this will give repayment certainty over a longer term and lower the risk to you of future interest rate rises.
After our discussion, you have opted for a shorter term of xxx% for xxx years.
Split
I have recommended splitting your loan between xxx years and xxx years. This will mean that the total loan will not come up for refix at the same time, giving greater resilience in the face of future interest rate rises. It also means we get to take advantage of the lower and higher rates, averaging out the benefits and risks.
Revolving Credit/Offset
I have recommended a revolving credit/offset facility to you as this matches your client profile. By using the funds that you |already have in your savings account/will be saving in the near term| to offset against your home loan, this will lower the overall interest expense for you. This is a product that if used well, can save you money and repayment time on your home loan. If you are regularly using more of the available funds in this facility, please contact me at any time. Please also call me once the loan has drawn down, as I would like to make sure that this account is properly set up.
Variable
I have recommended a variable rate for your home loan. This will allow you to repay the loan faster with no penalties. This is also a requirement when building a home, and we can look to fix this when the build is complete. Please contact me at this point.
Clawback
ASB/ANZ/Westpac/SBS/Sovereign/BNZ
xxx have given you a cash contribution of $xxxxxx. This is subject to a 3 year clawback, meaning that if you refinance or cancel your loan within 3 years, then some or all of this cash contribution may be recouped by the bank.
xxx have also paid us a commission as in this document. This is also subject to a 3 year clawback, meaning that if you refinance or cancel your loan within 3 years, then some or all of this commission may be recouped by the bank. In this case, we would then charge this commission clawback to you.
TSB/Kiwibank/Co-op
xxx have given you a cash contribution of $xxxxxx. This is subject to a 4 year clawback, meaning that if you refinance or cancel your loan within 4 years, then some or all of this cash contribution may be recouped by the bank.
xxx have also paid us a commission as in this document. This is also subject to a 4 year clawback, meaning that if you refinance or cancel your loan within 4 years, then some or all of this commission may be recouped by the bank. In this case, we would then charge this commission clawback to you.
First Home Partner
We have opted for Kainga Ora’s first home partner scheme. This has allowed us to go to a higher purchase price. Kainga Ora also own a share of your home. The amount you owe them is recalculated every month based on their internal figures and is based on a % of your home, it is not a fixed amount. There are no regular repayments on this contribution.
in this instance, our first priority is to buy Kainga Ora out of this shareholding, even before repaying extra on the mortgage. We can do this in 2 ways. You can repay them lump sums of $1,000+ via the first home partner portal, or we can look to top up your borrowing to buy back these shares. You can also sell the property and repay them their share at that time. We need to do this within 15 years, or else penalty fees and interest may apply.
I will follow up with you at least once a year to look to see if we can top up our home loans and purchase those shares back. Please let me know if you come into any lump sum windfalls and we can look to allocate this.
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Please find attached your statement of advice. It goes through your application from start to finish.
If you have any questions or if any information isn't accurate, please contact us as soon as possible.
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