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When Your Address Is a Deal-Breaker (And How to Fix It)
Manage episode 491984656 series 3603762
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Geographical discrimination in mortgage lending is rarely discussed, but it nearly derailed the homeownership dreams of a hardworking Greymouth couple. Their story reveals a shocking reality that many New Zealanders may face when seeking to buy in regional areas.
Meet our clients: a couple in their 30s with three young children who had done everything right. They'd saved $68,000 for their deposit through KiwiSaver and personal savings. Both earned stable incomes of $55,000 in secure professions. On paper, they were ideal candidates for the Kāinga Ora first home loan scheme. Yet their application was declined by a major lender for one reason only – they wanted to buy in Greymouth on the West Coast.
This was unprecedented in my 15 years in finance. The same clients would have been approved had they wanted to buy in Wellington, Christchurch, or other major centres. We immediately regrouped and approached alternative lenders, eventually finding a major bank that assessed their application based on their financial merits rather than postal code. Not only were they approved, but they secured more than their initial requirement – and just in time to avoid the significant Kāinga Ora low equity premium increase coming on July 1st (jumping from 0.5% to 1.2%).
The takeaway is clear: if you're buying in a regional area and face rejection, don't assume it's your financial position at fault. Different lenders have different geographical restrictions, and finding the right match is crucial. Have you faced similar obstacles in your homebuying journey? We'd love to help you navigate these hidden barriers to homeownership. Contact us today to discuss your situation and discover options you might not know exist.
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Chapters
1. First Home Buyer Case Study Introduction (00:00:00)
2. Client Profile and Deposit Details (00:00:55)
3. Location-Based Lending Rejection (00:01:32)
4. Success with Alternative Lender (00:02:16)
5. Upcoming Changes to Kāinga Ora Premiums (00:03:03)
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