On the left below is a list of risks which may be associated with lending advice. If you believe you may be exposed to any of the risks outlined and would like to talk to us about mitigating that risk, please contact us.
On the right below is a list of things that would trigger a review of your advice - usually because your circumstances have changed in a significant way such that the advice you received may no longer be suitable. If you have experienced any of these triggers and would like us to review your advice, again please contact us.
We will always take steps to mitigate risks when providing financial advice, however it is important that you are aware of the risks associated with our advice so that you can make an informed decision. Here are some of the risks associated with lending advice and how they may affect you.
Interest rates are subject to change on a cyclical basis (and sometimes in response to major economic factors) so it is important to manage your interest rate risk. Using your loan structure can be a good way of doing this. By splitting your loan into multiple loans, you can fix for different time periods - meaning you lock in current interest rates for different periods of time on portions of your loan. It is important to discuss this with your Liquid adviser when choosing a loan structure - so if we haven't talked about it recently do get in touch.
If you decide to repay a fixed rate loan in part or in full before the end of the fixed rate period, then an early repayment adjustment (ERA) may be charged by the lender. The amount charged is based on a calculation using interest rates and the time left on the fixed rate period. This is not a charge that we can have waived as your adviser, so it is important to consider this when deciding to sell a property, refinance existing debt or break a fixed rate. We will always talk to you about this when making lending decisions, but if you want more information we are always available to discuss in more detail.
Our advice is always based on your current income, including any rental income you are receiving or will be receiving upon purchasing an investment property. If your income changes, due to a change in employment circumstances or because your rental property is untenanted for some time, this may make it difficult for you to meet lending repayments. Always consider what your plan would be with regard to your lending before entering into an agreement with a lender. We are more than happy to help you talk this through if you wish.
A condition of new lending is always that you have full and unencumbered insurance on the property you are purchasing. If you let the insurance lapse or don't keep the property properly insured (e.g. fail to get construction insurance for major renovations) then you incur risk if the property were to be damaged.
If you would like to talk to us about any of the risks above (or anything else!) get in touch with your adviser or go to our Contact page.
We always ensure that if we haven't been in touch recently that you receive an annual check-in to review your financial situation. However, if something happens and you wish to make sure your financial advice is still suitable, get in touch with us. The sooner we know about your change in circumstances the sooner we can determine if any of your financial products need to change.
If you have a change in employment, this may necessitate a review. Changes such as being made redundant or being promoted can have a significant impact on your financial position and therefore the current validity of the financial advice received prior to the change. Best thing to do is give us a call if you experience any of the above!
If interest rates change significantly, i.e. more than 1.5% above or below, this affects repayments and therefore your ability to meet repayments. This could mean a current property becomes unaffordable, or an investment property becomes affordable. If rates have changed significantly since we last spoke, get in touch to talk about your financial position.
Having children (or more children), retiring from work, an accident or illness resulting in significant time off work - all of these may mean your financial position should be reviewed.
Taking on new debt or unforeseen costs that must be met can impact your ability to service lending. Contact us promptly if you find yourself in this situation so that we can make sure your financial advice remains fit for purpose.
The above should serve as a list of examples of when you should look to review your financial advice. If you experience significant change in your life, remember that your Liquid Financial Adviser is always here to help you make financial decisions and provide you with the right financial products.
You can always reach your Liquid Adviser, or you can use our Contact page.
Advice
Lending
Investments
Insurance
Level 1
4 Fred Thomas Drive
Takapuna
0800 LIQUID
info@liquid.co.nz
Privacy Policy
Terms & Conditions
2019 © Copyright Liquid
Our advisers are engaged directly by Wealthpoint Limited, which holds a financial advice provider licence. For more information, visit their website here.
