Avanti Property Lending Guide
Our approach
In an industry where box ticking is the norm, Avanti Finance does things differently. We’re uniquely Kiwi, just like our customers, and we’ve been working with introducers, advisers and brokers to provide flexible options for over 35 years, helping thousands of New Zealanders get into a new home, a new car, start a new business or consolidate their debt.
We use an individual assessment framework to understand the context and background of the borrower – not just the borrowing itself.
That means we can often help with special situations. To do this, we’ve developed flexible loan solutions to fit clients like yours.
In this guide, we share the details of our long term first mortgage products, short term first mortgage asset loans, and our caveat-secured personal loans. Read on to find out how Avanti Finance could help your customers hear ‘yes’.
Our broad product offering
THIS GUIDE COVERS:
- Long term 1st mortgages (Near Prime)
- Long term 1st mortgages (Specialist)
- Short term asset-lend 1st mortgages (inc. bridging loans)
- Caveat-secured personal loans
- Second mortgages
AVANTI FINANCE ALSO OFFERS:
- Unsecured and vehicle-secured personal loans
- Vehicle purchase loans
If you’d like further information about these products, please contact your local BDM.
We're here to help
HERE ARE SOME OF THE CLIENT SITUATIONS WE MIGHT BE ABLE TO HELP WITH:
- Clients refinancing or consolidating debt
- First home buyers
- Investors
- Low doc options
- Account conduct issues
- Fixed price and turn key construction
- Kiwis living and earning offshore
- Mortgage arrears/PLA
- IRD bills
- Multi-ownership structures
- Bridging
- Equity release
- Capitalising loans available
- Vacant land
- Gifted non-conventional deposits
- Credit impaired
SECURITY ISSUES BUT WITH CLEAR PLAN TO CORRECT:
- Flats plan issues (cross-lease properties)
- Working towards CCC
- Cost overruns on a build
- EQC “as is where is”
The terms set out below (under Loan Terms) are the maximum available. The individual terms offered to a customer will depend on the customer’s profile and Avanti’s overall assessment of the application.
All applications are subject to our lending and credit criteria, terms, conditions and fees. In all cases, the purpose of the loan should meet the requirements and objectives of the applicant.
If you’re unsure if an application meets our criteria, please contact your Business Development Manager to discuss.
Near Prime & Specialised
Maximum Loan Amounts
Standard Residential Property
- Minimum $50,000
- Maximum per table, subject to property type restrictions
Category
LVR <=85%
LVR 85.1%-90%
Auckland & Queenstown Lakes
$2,500,000
$1,000,000
Hamilton, Tauranga, Christchurch, Wellington
$2,500,000 – up to 80%
$1,750,000 – up to 85%
$1,000,000
Dunedin, Nelson, New Plymouth
$2,000,000 – up to 80%
$1,750,000 – up to 85%
$1,000,000
Cambridge & Mt Maunganui
$1,750,000
$750,000
LVR <=80%
LVR 80.1%-90%
Napier
$2,000,000
$1,000,000
All other locations
$1,000,000
$750,000
- Minimum size 35m
- Maximum loan size per table
Auckland
LVR <=85%
$2,000,000
LVR 85.1%-90%
$1,000,000
Hamilton, Tauranga, Christchurch, Wellington
LVR <=85%
$2,000,000 – up to 80%
$1,750,000 – up to 85%
LVR 85.1%-90%
$1,000,000
Cambridge, Mt Maunganui, New Plymouth, Nelson, Queenstown, Dunedin
LVR <=85%
$1,750,000
LVR 85.1%-90%
$1,000,000
Napier
LVR <=80%
$1,500,000
LVR 80.1%-90%
$1,000,000
All other locations
LVR <=80%
$1,000,000
LVR 80.1%-90%
$750,000
Apartments
(Freehold only)
(Freehold only)
- Minimum size 35m²
- Maximum loan size per table
Location
LVR <=75%
LVR 75.1%-80%
Auckland or Wellington
$2,000,000
$1,000,000
Tauranga, Mt Maunganui or Papamoa
$1,500,000
$1,000,000
All other locations
$1,000,000
$1,000,000
Auckland
LVR <=75%
$2,000,000
LVR 75.1%-80%
$1,000,000
Tauranga, Mt Maunganui or Papamoa
LVR <=75%
$1,500,000
LVR 75.1%-80%
$1,000,000
All other locations
LVR <=75%
$1,000,000
LVR 75.1%-80%
$1,000,000
Lifestyle Blocks and Vacant Land
- Maximum 6 hectares*
- Maximum LVR 70%
*Up to 10 hectares may be considered on a case-by-case basis, upon request.
Obligor Limit
- Must not exceed $3,750,000 dependent on security location (inclusive of fees)
Terms
- Minimum 5 years
- Maximum 30 years*
*Where the term exceeds likely retirement age, consideration will be given to the capacity to service, or otherwise repay the loan, post-retirement.
Interest Only
- Maximum 5 years
Purposes
- All purposes considered
- Evidence of purpose will be required
Near Prime
Specialised
Maximum LVR
Non-exempt:
- Owner occupied – 90%*
- Investment – 65%
Exempt
- 90%
*subject to high LVR funding limits
- Owner occupied – 80%
- Investment – 65%
High LVR
- LVR exemptions available per RBNZ criteria
- Minimum 5% genuine savings
- Stable employment history
- No interest only
- RV required, less than 3 months old
- Available on exception basis
Low DOC
- Not available
- Available
- Maximum loan size $1,000,000
Near Prime
Maximum LVR
Non-exempt:
- Owner occupied – 90%*
- Investment – 65%
Excempt
- 90%
*subject to high LVR funding limits
High LVR
- LVR exemptions available per RBNZ criteria
- Minimum 5% genuine savings
- Stable employment history
- No interest only
- RV required, less than 3 months old
Low DOC
- Not available
Specialised
Maximum LVR
- Owner occupied – 80%
- Investment – 65%
High LVR
- Available on exception basis
Low DOC
- Available
- Maximum loan size $1,000,000
Avanti will pay a commission of 0.8% of the loan amount for our long term first mortgage products. See our clawback terms below:
Near Prime First Mortgages (24 month clawback period)
Avanti is entitled to clawback any commission paid using the following calculations:
- If the loan is paid back between 0 – 12 months from the date of drawdown, 100% of the commission clawedback.
- If the loan is paid back after 12 months and up to 24 months from the date of drawdown, 50% of the commission clawedback.
Specialist First Mortgages (12 month clawback period)
Avanti is entitled to clawback any commission paid using the following calculations:
- If the loan is paid back 0 – 6 months from the date of drawdown, 100% of the commission clawedback.
- If the loan is paid back after 6 months and up to 12 months from the date of drawdown, 50% of the commission clawedback.
Advisers are able to charge a fee on all our products – up to a maximum of 1% of the loan amount on our long term first mortgages and in most instances the fee can be capitalised onto the loan and paid on settlement.
The terms set out below (under Loan Terms) are the maximum available. The individual terms offered to a customer will depend on the customer’s profile and Avanti’s overall assessment of the application.
All applications are subject to our lending and credit criteria, terms, conditions and fees. In all cases, the purpose of the loan should meet the requirements and objectives of the applicant.
If you’re unsure if an application meets our criteria, please contact your Business Development Manager to discuss.
First Mortgage
Second Mortgage or Caveat
Loan Amounts
Standard residential property
Location
LVR up to 80%
Auckland & other main centres
$2,000,000
Rest of NZ
$1,000,000
Location
LVR ≤80%
LVR 100%
All Locations
$100,000
$50,000
Apartments
(Freehold only)
(Freehold only)
Location
LVR ≤75%
LVR 75.1% – 80%
Auckland or Wellington
$2,000,000
$1,000,000
Tauranga, Mt Maunganui or Papamoa
$1,500,000
$1,000,000
All other locations
$1,000,000
$1,000,000
Lifestyle blocks and vacant land
- Over 6 hectares considered at Avanti’s discretion
- Maximum LVR 80%
Commercial property
- Can be considered at Avanti’s discretion maximum loan amount and/or LVR considered on a case-by-case basis subject to property type/nature and location – typically to a max 60-70% LVR
Properties under construction
- Can be considered at Avanti’s discretion on a case-by-case basis – we rely on “as is:” value not on completion or cost to complete value and typically do not exceed 65% LVR of the “as is” value through the construction
For more information, please discuss with your BDM.
Loan Terms
- Minimum 6 months
- Maximum 3 years (with a balloon payment)
- Minimum 6 months
- Maximum 5 years P&I (> $50k) or 10 years P&I (<=$50k)
- Either P&I or interest only
Maximum LVR
- 80%*
*Up to 90% by exception only, with confirmed exit, max loan amount of $1m applies.
- 100%**
**Aggregate LVR including the first mortgage.
Interest Only
- Maximum 3 years (with a balloon payment)
- Capitalising loans are available on a limited basis only, please enquire first
Purposes
- All purposes considered
- Evidence of purpose and/or exit strategy may be required
First Mortgage
Loan Amounts
Auckland & other main centres
LVR up to 80%
$2,000,000
Rest of NZ
LVR up to 80%
$1,000,000
Loan Terms
- Minimum 6 months
- Maximum 3 years (with a balloon payment)
Maximum LVR
- 80%*
*Up to 90% by exception only, with confirmed exit, max loan amount of $1m applies.
Second Mortgage or Caveat
Loan Amounts
All Locations
LVR ≤80%
$100,000
LVR 100%
$50,000
Loan Terms
- Minimum 6 months
- Maximum 5 years P&I (> $50k) or 10 years P&I (≤$50k)
- Either P&I or interest only
Maximum LVR
- 100%**
**Aggregate LVR including the first mortgage.
Interest Only
- Maximum 3 years (with a balloon payment)
- Capitalising loans are available on a limited basis only, please enquire first
Purposes
- All purposes considered
- Evidence of purpose and/or exit strategy may be required
All Products
S & P Agreement
May be used as the sole valuation method where:
- Arm’s length transaction, through a licenced real estate agent
- Dated within the last 3 months
- Maximum LVR 80%
iVAL (AVM)
- Maximum LVR 80%
- Can be used to support purchases where above requirements are not met. Lower of purchase price or iVal applies in these cases.
Registered Valuations (RV)
RVs may be requested at Avanti’s discretion, but commonly in the following situations:
- LVR > 80%
- iVal is not available
- High value property, or those with special/unusual features
- Concerns about property condition and/or saleability.
Maximum age of valuation:
- 6 months – LVR <=80%
- 3 months – LVR > 80%
PAYE
- Salaried or wage earners
- Verified by bank statement
- IR3 tax return
- Work and income / benefits / national superannuation
SELF-EMPLOYED
- Verified financial statements, accountant’s verification letter, GST returns with audit
- Low doc – 3 months of bank statements only
OVERSEAS INCOME*
- We will accept both self-employed and PAYE – subject to client profile, and acceptable verification (some countries may be excluded)
- We will scale to account for exchange rate movements and allow a buffer
FULL STATEMENT OF POSITION
- Detail of assets and liabilities
RENTAL AND BOARDER INCOME
- Rental 80% of actual income received
- Boarder income 80% of actual income received
- Avanti will consider a broad range of income sources – dividends, interest, bonuses, allowances, commissions, etc scaled at 80%
- The key is being able to demonstrate that income is consistent and ongoing
KEY SERVICING CONSIDERATIONS
- We apply an interest rate buffer to all long term consumer loans
- For interest-only loans, repayments are based on the remaining amortising term
- Credit cards and overdrafts consider 3.8% of the limit used
- Home loan revolving credits – calculated over a 25-year P&I term
* Considered by exception.
ACCOUNT CONDUCT
- Transactional statements should be reviewed prior to submission and any irregularities (over limits, out-of-character transactions, reversals, repayments to debts not listed on the application, etc) should be explained in a diary note
- Mortgage arrears – we need to understand how they came about and what has changed in the customer’s circumstances
BANKRUPTCY
- Discharged bankrupt client only – explanation of how it came about and what has changed
- Liquidation requires full resolution with confirmation of no debts outstanding
CREDIT PROFILE
- Avanti uses comprehensive credit reporting to assess client’s credit file and profile
- If credit issues exist, we require an explanation in a diary note
RESIDENCY
- NZ residents or citizens
- NZ permanent resident living overseas (in most countries)
- NZ residency with travel restrictions
- Overseas resident living in NZ holding a NZ working visa
SEND APPLICATIONS TO:
NORTH ISLAND BASED ADVISERS
applications@avantifinance.co.nz
SOUTH ISLAND BASED ADVISERS
southernteam@avantifinance.co.nz
WITH SUPPORTING DOCUMENTS:
- Adviser diary note – including suitability statement.
- Adviser application / client statement of position.
- Signed declaration / Privacy Act authorisation.
- Current signed photo identification.
- Income verification.
- Sale and purchase agreement or registered valuation if applicable.
- Full copy of the Trust Deed if applicable.
- Any additional supporting documents for confirmation as needed to support the application.
This document is a guide only and is published solely for informational purposes. It doesn’t take into account an applicant’s particular financial situation. Lending and credit criteria, fees, terms, and conditions apply. Information in this guide is correct at the date of publication, 29 May 2024.