Insurance for Christchurch properties from a lending perspective

Posted on Sunday, February 12 2012

Last week I was speaking with the head of lending for Westpac, and I asked him ” if you had one wish (in regards to lending) what would it be? Without a moments hesitate he came back to me and said ‘Insurance’.

He of course was referring to full replacement insurance as without this lenders in New Zealand will not release the funds required to purchase the residential house, be it owner occupied or for a rental purposes.

This message is the same from all lenders – bring back insurance!

So what are Cantabrians (particularly people who live in Greater Christchurch) doing for insurance when purchasing a property?

The answer is easy…to a point.

When a person or couple are looking to buy a property for themselves they need to be aware that the property they are looking to purchase is currently owned by an owner occupier! This way the existing insurance can simply be transferred into the new purchaser’s name. Likewise if one is looking to purchase a rental then the vendor of the house has to have rental insurance in place on the property already.

So what if this is not the case? Say you find a house you would like to buy and live in, but the house is currently insured as a rental? In this case I’m afraid the deal will ultimately crash as no new insurance can be written effectively handcuffing the lender in regards to releasing the funds required to purchase the property.

Outside of the insurance restrictions it is largely business as usual in Christchurch. Customers who can purchase are enjoying the same low interest rates and high contributions to legals the rest of New Zealand are enjoying. Those who have been unlucky enough to have been Red Zoned get some relief in the form of a 2% reduction in the floating rate for the first 12 months of their new mortgage being drawn.

Despite the disruption I have had the busiest start to a year I have had in a long time.

By Scott Miller – Advanced Mortgage Solutions

www.AdvancedMortgageSolutions.co.nz

Christchurch Mortgage Broker Explain Insurance for Christchurch properties


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