blog-post

Debt Consolidation

Sun, 25 Sep 2016 04:58:44 +0100

Case study

Applicant
Auckland couple, aged 25 and 29 years old, with two children aged 3 and 1. They were looking to improve their financial position to help them on the path to home ownership. Their combined income was approximately $83k, a Net Servicing Ratio of 85% and a strong credit profile. They also had a 2013 vehicle to offer as security.

Application
They applied to consolidate two personal loans at above 15.9%p.a. and a maxed out credit card at 23.9%p.a.

Result
Our team uncovered another personal loan at 13.95% and offered to consolidate a total of $33k into a secured personal loan at 13.90%p.a. over 5 years. The couple are thrilled with the results and happy to now have only one loan payment to manage at a lower rate.

NZ couple in Aus take major bank to court for racial discrimination

Wed, 10 Aug 2016 01:03:10 +0100

New Zealand couple Charles and Judith Cairns residing in Perth are taking ANZ to court for selling them a life insurance policy which is has no worth because they don’t hold Australian citizenship, RNZ News reported.

The Cairns’ intend to take their case to the New South Wales Anti-Discrimination Board after a ruling from the New South Wales Civil and Administrative Tribunal that they have a case to take.

Cairns was beyond belief when a financial planner pointed out last year that they wouldn’t receive any payout because they are not citizens or permanent residents – they had already parted with $20,000 in premiums over nine years on a $200,000 policy.To read Full Story please click on this link
http://www.nzadviseronline.co.nz/news/nz-couple-in-aus-take-major-bank-to-court-for-racial-discrimination-220369.aspx

Cancer patients to petition for Pharmac funding

Wed, 02 Mar 2016 09:00:50 +0100

Patients such as Leisa Renwick who have had miraculous results with melanoma drugs will join dying patients and their families at Parliament tomorrow to petition the Government to lift Pharmac funding.

The Tauranga woman was told by Tauranga hospital last May she had only weeks to live but expensive private treatment has saved her life.

After a course of gene-therapy drugs, she is now is remission.

And now she is on a course of immuno-therapy drugs, paying $8500 every three weeks to have a dose of pembrolizumab (Keytruda is the commercial name) at a private hospital.

Her insurance company pays the private clinic fees of $2500 each time but wont cover the cost of drugs that are not available through Pharmac, the state's bulk-buying drug agency.

Asked how she affords it, she said she and her husband both have good jobs, she has tapped into some funds, and she has cashed in her superannuation.

Pharmac is in negotiation with several manufacturers of what have proved to be wonder-drugs for some melanoma patients and some which might have wider applications.

Keytruda was registered in New Zealand last September but Pharmac's clinical professionals have classed it a "low priority" until it gets better data on survivability.

Leisa Renwick is now well enough to have organized the petition, which will be received by her local MP, Simon Bridges.

"He is sympathetic but he emphasizes that he is receiving the petition as a Member of Parliament, not as a minister, that Health is not his portfolio and he cant intrude on the Minister of Health's portfolio."

She said was not happy that Health Minister Jonathan Coleman did not have the time to meet the petitioners "yet when you look at his Twitter feed, he seems to be taking his responsibilities as Minister of Sport very seriously."

Her message to Dr Coleman was one of responsibility: "They are accountable for this decision. They keep trying to say they are separate from Pharmac but Pharmac are owned by the Crown."

"The fact is he has people who are dying and will die if they are not treated. Some of them will die anyway. The medicine wont work for everyone but at the moment, they don't even have the chance to fight."
http://m.nzherald.co.nz/politics/news/article.cfm?ref=rss&c_id=280&objectid=11597330

How your low credit score can hit your future borrowing.

Sat, 16 Jan 2016 03:17:07 +0100

Skipping a bill or a credit card payment does not usually seem like a big deal.
Once the rent has been paid and next week's salary is in, catching up is not often a problem.
But, starting next Sunday, missed and late payments will have the potential to affect people's credit ratings.
Banks, finance companies, telcos, electricity, gas and insurance companies will be able to collect and swap information showing how much credit someone has and how they are getting on with repayments.
A few hiccups should not hurt anyone's ability to borrow money for a house, car or holiday in the future, says credit reporting bureau Veda.
But a pattern of skipping – even on small payments – could result in a negative score.
Companies stress that nothing will happen immediately – it takes months or years to build up a credit history and lenders are not yet ready to collect the information.
Once lenders have notified their customers that they are going to start, they can hold the information for up to two years.
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First up are likely to be four "top end" banks and finance companies, which, Veda's John Roberts said, were looking to supply it data in the middle of this year.
Within a year other lenders would join, and possibly later on telcos and power companies.
The information will be swapped on a "whoever gives, gets" basis under a system worked out by umbrella body the Retail Credit Association.
But first companies need to get their IT systems ready, says RCA head Justin Kerr.
"I reckon in about three or four months' time if a consumer gets a copy of their credit file they will start to see information," says Roberts.
Kiwibank, Westpac and ANZ say they will take part although they can not yet say when. ASB and BNZ said they were looking into it.
At the moment, it is all too easy to forget there is a credit file held somewhere in your name.
But consumer and privacy watchdogs say that needs to change.
It is not very easy for an ordinary person to work out how they will be scored under the new system. Paying all bills on time is obviously the best approach, but how much leeway is there? New Zealand's two big credit agencies, Veda and Dun & Bradstreet, will not disclose the exact formulas they use to assign people credit scores but they did provide some guidance.
"If you have missed a payment on your credit card it will show as a one month missed payment. If you catch it up the next month it will show that you've caught it up," says Roberts.
He says the pattern of payment matters more than the amount, and one or two misses should not matter too much.
"A risk assessment is all about behaviour and if you miss four or five payments, whether it's $100 or $1000, it is still predictive of your likely risk."
John Scott, of Dun & Bradstreet, says lenders will look for patterns indicating whether a missed payment is an oversight.
"If you've gone away and forgotten a payment, broadly ... people will see that you missed a payment but did you immediately then correct it the next month?"
They might ask: "Have they missed a second payment, and have they missed other payments in that month? Are they missing across the board or are they only in certain areas?" he says.
Ultimately lenders – not bureaus – will decide what is important for the type of credit someone wants, and bureau scores will only form part of the picture alongside income, home ownership and other factors.
The rules are changing because the Privacy Commissioner's office was convinced that on balance, ordinary people would be better off.
Commissioner Marie Shroff says she will be closely watching how things unfold.
"This is another example of Big Data. Everything is pretty much collected these days even though it may not be available to the general public [and] a lot of companies are making a lot of money," she says.
Australia is making the same move, leaving few Western countries without a similar system, she says.
The commission drew the line at some of the more intrusive aspects allowed in the United States, where companies can see how much of someone's credit is utilised (for example the balance spent on a credit card) and employers and landlords have access to files.
As always, people will have to give lenders permission to look.
Federation of Family Budgeting Services head Raewyn Fox hopes the changes will stop so many people having to resort to predatory high interest lenders that specialise in "bad credit" loans.
People who suffer a financial meltdown after a divorce, death in the family or a job loss can do little at the moment to budge the black mark that sits on their file for five years.
Now everyone who pays their bills diligently will have a chance to prove they deserve mainstream credit, says Fox. "Probably between half and three quarters of all the families we see, some kind of life event has tipped them over," she says.
"If you live in a low income area and don't have a particularly high income you might not be rated immediately as a good credit risk, but if you can show ... that you've always paid your bills on time a lender might be prepared to lend to you," says Shroff.
On the flipside it will also be possible to score badly in entirely new ways.
Until now, only debts that went badly wrong have showed up on people's credit files. To register as having a default under the current system "someone has not only missed a payment, they have missed two or three payments, gone through a number of the credit provider's internal processes, still not paid them, been passed on to a credit collection agency and still not paid," says Scott.
The new system may pick up people who have been flying under the radar.
West Auckland commercial lawyer Carolyn Ranson gives the example of a friend who often struggles with her bills but has never actually defaulted.
"She has never had her phone cut off but there have been times when things have been really tight and she hasn't been able to pay bills on time. All that information now will stack up against her," says Ranson.
"If you have struggled to pay your bills in the past, potentially there could be a stream of people going the other way [away from mainstream lenders]," she says.
As for banks, better credit information should save them money, theoretically allowing them to drop some of the "safety" margins on unsecured personal loans – currently about half a percentage point – says Massey University banking expert David Tripe.
Whether that happens will depend on the competitiveness of the banking industry, says Tripe.
Banks were coy when asked whether prices would drop, with only Kiwibank saying it thought the changes would ultimately help cut credit rates.
Eventually, good payers could be offered more competitive interest rates than bad payers, although Bankers' Association regulatory director Karen Scott-Howman stressed that was only a possibility. Perhaps the most positive change in the eyes of budget advisers is the ability to spot people who are juggling too much credit.
People borrowing from Peter to pay back Paul, and failing to tell Peter, may find themselves cut off once lenders see the extent of their loans. (Although while many finance companies are in, others are likely to remain outside the information sharing deal so their loans could be hidden).
In Hong Kong, according to research cited by Dun & Bradstreet, defaults and bankruptcies spiked once lenders realised how much trouble some people were actually in. In some countries, access to credit contracted at first.
"Once you work through that particular spike there are lower rates of delinquency, higher rates of financial inclusion and more people can access mainstream credit," says Scott.
Overall the country's credit rating improves, says Roberts.
Still, borrowers may wait some time to see the benefits. The credit bureaus stress it takes months or years to build up reliable records, and their usefulness depends on a lot of lenders contributing.
Would the Privacy Commission change back the rules if no benefits for ordinary people materialised?
"We're not in a position really to collect that [economic] information very effectively but we will be working with key stakeholders to assess whether the claimed benefits have emerged," says Shroff.
"A more likely scenario would be refinement or tightening of the rules, but if major problems emerged we would look at things fundamentally again."
As a trade-off for new powers lenders must supply yearly independent audits showing how they are handling the information, and the Privacy Commissioner handles complaints. A review is planned after three years.
Until then the best thing a person can do is take advantage of their right to a free copy of their credit file. Credit bureaus are obliged to provide these within 20 days (usually they arrive sooner) and people can challenge any mistakes that they find.
"Your credit reputation is an important part of your ability to operate in modern society," says Shroff.
"Everything you do these days is pretty much recorded even though it may not be public. Like all good modern inventions there is a good side to that. But there is also potentially a slightly negative side, unless you are very careful."
CHANGES IN A NUTSHELL
From April 1 whether people pay their bills when due and whether they meet their repayments will be recorded by banks and credit providers, and uploaded monthly to a person's file held by credit bureaus.
Banks, finance companies, telcos, electricity, gas and insurance companies can see this, if the person gives them permission, but landlords, employers and others cannot.
How much credit people have with different lenders will be held on file, for example the total credit limit on all credit cards.
To help stop identity fraud people can put a stop on their file for free, if, for example, they lose a wallet or handbag and fear that someone is using their identity to apply for credit.
Everyone is entitled to get a free copy of their file from the credit bureaus Veda and Dun & Bradstreet.

Interest Rates Unchanged for Now

Sun, 20 Nov 2011 00:28:26 +0100

Reserve Bank governor Alan Bollard has decided to leave interest rates alone for the time being, with the official cash rate (OCR) left unchanged at 2.5 percent in October. However, despite this record low figure, there is speculation in some quarters that interest rates may drop even further during the next six months.

Alan Bollard spooked the financial markets slightly in late October, after speaking of declining business confidence and a weakness in recent inflation and growth data. National inflation rose by only 0.4 percent during the September quarter, which was only just above half the expected figure of 0.7 percent.

However, according to Westpac chief economist Dominick Stephens in an interview with landlords.co.nz, "There was no overt change in how the Reserve Bank sees the outlook for the economy or monetary policy -- The market's read that as the Reserve Bank saying: I see the weaker data but I'm not going to change my plan." Not only has there been no rise in the OCR, some analysts are even suggesting that a further cut is likely.

According to HiFX Senior Dealer Dan Bell in an interview with Bernard Hickey on interest.co.nz, there is now more chance of an OCR cut than a hike over the next six months. "If we see a further blowout in the European debt crisis and that impacts on global credit markets, which it already is, then the cost of borrowing for our banks is going to go up, and potentially we're going to be paying more for our debt, both for households and businesses," said Bell.

"The Reserve Bank is sitting tight with the OCR at 2.5%, but if borrowing costs are going up and we're paying more for our overseas debt, then potentially we need to see a rate cut just to keep interest rates where they are. I can't see interest rates going up any time soon. Talking to our clients, many importers and exporters, a lot of small to medium sized businesses, it's still pretty tough going out there." added Bell.

Although he didn't mention it, the strength of the domestic currency would have also influenced Bollard's decision to leave the OCR unchanged in October. However, the dollar has weakened since then due to the ongoing financial crisis in Europe. According to Bell, there is a risk that the current interest rate advantage is not enough to prop up the dollar, which adds to speculation that another cut will be needed.

Not everyone is expecting the OCR to fall however, with Nick Tuffley, chief economist at ASB Bank, one of many economists still expecting the OCR to rise sometime between December and March. At the moment however, the situation remains unchanged, as the Reserve Bank attempts to analyse the implications of the European situation and what it means for New Zealand.

(Article Published By Edge Mortgages)

Low Deposit Borrowing - Did You Know?

Sun, 20 Nov 2011 00:26:23 +0100

Times have changed for borrowing dramatically over the past 18 months. At the beginning of this period Banks wouldn't lend more than 80% for a home purchase, where they are now going much higher. There are a number of reasons for this including more confidence in the market and continuing lower interest rates.

Did you know:

- You can borrow up to 95%, with the last 5% being Gifted?
- You can borrow up to 80% against an apartment?
- You can you use the equity in a family member's home instead of a deposit under certain circumstances

If you've only got a small deposit and would like to find out how much you can borrow, and the best way of borrowing it, then give the team at Life Investment Corporation a call to find out more. Click here

4 Golden rules to help you become rich. Article written By Lalit Bajaj(Green Line Financial ...

Sat, 12 Nov 2011 00:06:41 +0100

A week ago, a friend called to discuss about the current recession. He has a well-paid job

but unsure about the future.

After the usual exchange of pleasantries and enquiries about each other's family, the

conversation settled on whether to save for the rainy day (because of the uncertainty of the

future) or tempted by potential windfalls of investing in the fallen markets.

My friend was worried about virtually everything under the sun -- whether he should invest

in stocks or buys a home instead, whether he would have ample money for his retirement,

and so on and so forth.

He asked me for suggestions but refused to disclose any financial details, be it his salary or

the amount he has available for investing.

Which brings me to the first rule of money management: Honesty works. Be honest with

yourself and, if possible, with a financial planner or someone you trust.

Since he refused to part with any information, I ended the conversation with some general

suggestions I hope will help him. You might find them useful too.

1. Get real

I, for one, would love to have $1M in my bank account by the time I turn 65. It's a great wish

to cling to. But is it even vaguely realistic? Do I have any notion of how much I have to save

to get that amount?

If I am 30 now and want $1M when I turn 65, let's see how much I would have to save,

starting now.

Assuming Net rate of return: 4%

Time period: 35 years

Current savings: Nil

To reach my target, I will have to save $335 every week or $1496 per month and it should

earn a return (after tax) of at least 4% per annum. This is not an impossible target, but it

does not mean I will be rolling in luxury when I turn 65. Assuming I’m saving 10% of my net

income, I’ll have to earn about $15,000 (net of taxes) a month to be anywhere near my goal.

This surely may not be realistic for a lot of people, definitely not for me.

You need to figure out what you are saving for, how much you need to save for it and how

you are going to do it.

Use the following links to calculate:

http://www.sorted.org.nz/calculators/goal-machine 2. Get cracking

The key is to make your money works for you.

In the above example, we assumed a return of 4% per annum. Keeping your money in a

savings bank account will not earn you that kind of interest. Despite occasional

rises, interest rates in the Western world are on a gradual decline.

So, let your money work for you. Amongst fixed return investments, corporate bonds (A or

AA rated) are a good option.

The younger you are, the more you should invest in stocks because time is on your side to

ride the lows of the stock market. Over time, stocks give the highest return when compared

to other forms of investment.

If you don't want to take the plunge into stocks, try diversified equity managed funds. These

are funds that invest in the stocks of various companies in various sectors. Else, try

balanced funds. These are managed funds that invest in both equity (shares) and debt

(fixed return investments).

3. Learn to save

Investing smart is one thing. Spending wisely is another.

To get something, you have to sacrifice another. No one is asking you to live like a monk,

but neither is it healthy to live like there is no tomorrow.

Take a good look at what is really eating away your income.

Is it the incessant partying and pubbing or shopping and eating out? Even if you cut your

frivolous expenditure down by just $500 a month, you have an extra $6000, or maybe more

if you regularly invest it, at the end of the year.

My friend claimed that spending on cabs and eating out was chipping away at his bank

account because he did not want to travel by trains or buses.

4. Are you honest?

You must be honest with yourself; with what you want and whether or not it is achievable. If

not, see where you can compromise.

You may want to head to Europe for a holiday, but can you really afford it? It may work out

better for you to substitute it for a holiday in New Zealand. Or maybe an Australian

destination.

You may want a four-bedroom house, but can you afford it? You may be able to if you settle

for a city where real estate is not too expensive or a home in the far-off suburbs if you

choose Auckland.

Also, you may want to buy a home when you are 22 and have just landed your first job.

It may, however, be wiser to wait for a few years till you have a higher salary and more

savings to make a larger down-payment.

It's all right to dream. But don't let your dreams cloud reality. Once you get a grip on what

you are saving for, you will be able to achieve it.

How Much Life Insurance Do I Need?

Thu, 03 Nov 2011 22:52:01 +0100

How much life insurance you need are depends on Basic Factors like:

Time Left until Retirement – Many peoples’ biggest asset is their ability to work and earn income. Since most breadwinners purchase life insurance to replace that lost income in an unexpected death, you should consider how long you need to or plan to work. If you only plan working another 10 years, you may not need more than 10 years of life insurance coverage, and so on.
Spouse’s Income Potential - If your spouse does not currently work, would he or she be able to if need be? What is his/her income earning potential based on experience and education?
Consider Your Debt – It’s common to purchase life insurance to cover a mortgage, credit debt, or business loan. Consider how long the term of payments is. If your mortgage will be paid off in 30 years, do you really need whole life coverage? Why not just 30 year term?
Consider Your Savings & Investments – If you are actively saving money, adding to your 401K or IRA, etc., and your debts are decreasing as mentioned in #3, your need for insurance may greatly diminish in a short period of time. Please consider all of the above when determining how much life insurance you need.

Life Insurance Approval After Pulmonary Embolism (PE)

Thu, 03 Nov 2011 22:41:28 +0100

Yes, you can still be approved for life insurance at good rates after having apulmonary embolism or PE. Your best rating will be preferred, if the occurrence was more than 6 months ago and depending on the risks of recurrence. A pulmonary embolism is a blood clot in the lung, usually caused by a blood clot coming lose from the leg. Its most common treatment is the medication Coumadin. This inhibits vitamin K, decreasing the coagulant ability in the blood, which commonly dissolves the clot, and also reduces the risk of additional clots forming in the legs.

Most blood clot/embolism cases will fall around standard. Again, the details of each specific case will be important, such as how long ago the clot was found, what treatment was used, risks for recurrence, and provided that the proposed insured has normal pulmonary function, i.e. He or she should be able to exercise without any lung problems.

The severity of the clot will also be a factor. For example, what amount of the lung was affected? If it was merely a small sub-segmental PE, it’s possible that no treatment was recommended at all. As far as mortality goes, there is only a 26% chance of mortality if the PE is left untreated. Of course, the absence or presence of co-existing medical conditions will also be important for any life insurance underwriter to consider.

Since every case is specific to the person’s unique medical history, your best bet is to apply with the carrier whose price is cheapest and see how the offer comes back. Once they have an offer, a good independent agent will ask why that offer was made. For example, if you got standard, I would find out why, because I could take that information and possibly get a better offer from a different carrier.

Please share this article with your friends.

Why Trauma Cover Insurance ?

Thu, 03 Nov 2011 22:42:13 +0100

Trauma Cover insurance is about survival. Whilst many people make some sort of medical recovery, the likelihood of making a financial recovery is less certain.

Suppose a person has a mild heart attack and is seriously ill but is able to return to work after two months. Will he or she be as productive as before or stand the stress associated with working as hard?

Trauma Cover insurance (also known as critical illness insurance) provides a cash lump sum in the event of contracting a specified disease or trauma.

Five reasons to have trauma insurance

Having trauma insurance makes sense:

1. Treatment – pay for specialist or international medical treatment, or pay for drugs that are not government funded.

2. Peace of mind – knowing that you can repay debt and avoid this stress for you, your loved ones, even your business, while you are recuperating.

3. Environment – you can use the benefits to cover the costs of modifications to your home to aid recuperation and rehabilitation.

4. Freedom – knowing you to have the freedom to live your life free from worry about life’s unpredictable events.

5. Choice – you get to call the shots as to how and when you spend the lump sum payment.