Is a Prefab Home Your Ticket onto the Property Ladder?

Prefab houses are cheaper, quicker to build and have fewer budget blowouts, but banks haven’t given them much love … until now. Kylie explains…

Imagine owning a patch of land and one day a truck backs up, plonks down your new home and, voila, you’re a homeowner. Although a prefab home can seem like a friendly and easy entry into the property market, your bank most likely has had a different opinion … up until now. 

Prefab houses have been notoriously difficult to fund because there has been no security for the bank to lend against in the beginning. You’ve been required to pay for the dwelling before it was delivered to the site. Historically, this meant that it was out of reach for most first-home buyers—unless parents had enough equity to pay for the dwelling up front against their property.

But there’s a glimpse of sunshine peaking out from behind the dark cloud hanging over the prefab home dream. Westpac have recently completed a successful nine-month pilot in both Albany and Invercargill on a new build product called Prebuilt—a dedicated mortgage product aimed at helping Kiwi’s get into prefabricated homes. They’ve just announced this product and are beginning the process of rolling it out to all of New Zealand.

So, watch this space.

The prefab home market is expected to grow over 200 per cent in the next year. So, with Westpac’s new product on offer, the prefab homes should be a hit with both buyers and builders.

But what exactly is a prefab home?

Prefab homes (prefabricated homes) are built under controlled conditions, usually in a factory, and are transported to their final location by truck.

This method of building provides several benefits above traditional building methods:

·      They can be cheaper and their costs are tightly controlled (so no project blowouts!).

·      The build time is also much quicker than your standard build, with some prefab homes taking just 18 weeks.

·      The overall cost is around 15 per cent less than a standard build.

The prefab home designs have also come a long way in the last few years, with trendy and modern options on offer.

So dream on … and chat to us about the options!

5 Daily Steps to Wellbeing

As financial advisers, we help guide people through our fair share of stressful situations. So, as a team, we’ve made a commitment to prioritise wellbeing. And here are five simple steps to help boost your wellbeing today.

I have worked for Velocity for a few years now and have slowly learnt the importance of looking after my wellbeing, both at work and at home. Life is rather hectic (juggling three kids, a full time job, and Brendon) so I’ve put in place some strategies to ensure I look after myself and stay sane in the workplace.

The Mental Health Foundation recommends we incorporate five elements into our daily lives to improve our overall wellbeing. So I’ve taken these on board and try to follow these every day.

So, here are my five daily steps to wellbeing!

5. Be Active

I get up at 5am and go to the gym each morning. Starting the day with exercise   leaves me feeling good for the rest of the day and I tend to eat better throughout the day too!

Then it’s yoga in the evenings to unwind and de-stress. I aim to do at least 10,000 steps a day on my Fitbit, too, which often means taking breaks to walk around the block throughout the day. You may find both myself and Stevie walking around the office, looking at our watches, to get our steps up!

4. Give           

Each week I aim to do two good deeds, whether it’s donating to the local food bank or dedicating my time to someone who needs help. I make sure it’s something I want to do and have time for, so that I don’t end up feeling resentful. Doing something for others makes me feel good.

3. Learn        

I’m always trying to learn something new, both at work and at home. I try to set myself a fitness challenge as well as a learning challenge each month. I’m currently trying to master the “side crow” pose in yoga. Not easy! According to mentalhealth.org.nz, adult learning (which includes goal-setting) is proven to be strongly associated with higher levels of wellbeing.

2. Connect    

I try and catch up with friends as often as I can—even if it’s just for a quick walk or a cup of coffee. In the past, I’ve been too busy to fit it all in, so I am making a habit of fostering relationships and ensuring I allocate them the time they need.

1. Take Notice

Each day I think of one thing I am grateful for.

For further information head to mentalhealth.org.nz

How much do Mortgage Advisers get Paid?

Let’s peel back the curtain to see what’s really going on inside your favourite mortgage brokerage: How do we get paid? How much do we get paid? Why do we recommend one bank over another?

We have hit the headlines this week. Banks, insurance companies and advisers (i.e. us) are in the spotlight in Australia and NZ. One of the issues raised was how and how much we get paid. It is fair to say there are some interesting conversations going on in our world at the moment.

At Velocity we pride ourselves in doing the best possible job for you and giving you advice that is best for you. Apparently that isn't that common in financial services.

We currently get paid a commission from the banks and insurance companies with whom we place your business.

When we first meet you, we disclose how much all our providers pay us, even though there is no obligation for us to do so. Yes, each provider pays us slightly differently, so all we can do is explain that. It is also up to us to give you solid reasons why we recommend each product and company we use. 

We've just done a quick tally up and below you’ll see the percentages of business we have placed at all the home loan lenders we use (based on numbers of new settlements).

As you can see, it is "horses for courses". We don't have favourites. All the banks have their place and all our clients are different.

We try hard to operate with maximum transparency. Always feel free to ask us to justify our recommendations, as we want you to have confidence that we are doing a good job and working in your interest.

ANZ: 34%

BNZ: 16%

ASB: 15%

Sovereign Home Loans: 12%

Westpac: 11%

TSB: 2%

The Cooperative Bank: 1%

Non-Bank Lenders (Avanti, Liberty, BlueStone, Resimac): 9%

Brendon Ojala is a Registered Financial Adviser with Velocity Financial. No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.