Harcourts Team Group February 2019 Newsletter

FEBRUARY // 2019

Newsletter Harcourts Team Group

Anti-Money Laundering

What is it?

Customer Due Diligence Requirements From 1st January 2019 Real Estate Companies What is money laundering? will need to comply with the Anti-Money Laundering Customer due diligence requires Real Estate Companies to complete certain checks before we can list your property or and Countering Financingdescribes of Terrorism Act 2009.

Money laundering the process by whichbusiness criminals money obtained from from to make sell. We‘dirty’ will also require this information their criminal activities look legitimate, or ‘clean’. our clients who have commercial property they wish to

What is AML? Actarequires us tosource, also takeand reasonable steps to Theyinaim make this dirty look like it haslease. comeThe from legitimate therefore A law passed NewtoZealand called The money Anti-Money make sure the information we receive from you is correct, difficult to connect with itsofcriminal past.

Once that is achieved, criminals can introduce their dirty Laundering and Countering Financing Terrorism Act 2009, we will therefore need to ask you for documents to verify money financial system undetected. or “AML/CFT Act”into as it the is more commonly known.

The law this information. reflects New Zealand’s commitment in a worldwide initiative From there, the money can be transferred between bank accounts or financial products in New to combat global crime and reduce the impact criminal starters, we will need: Zealand or used to purchase goods andFor services, including real estate assets. (1) activity has withinor theabroad, global community.

• your full name; and • your date of birth; and How am I affected by the new legislation?

• your address.

What is an AML/CFT programme?

The legislation requires Real Estate Companies and other An Anti-Money Laundering/Counter Finance Terrorism (AML/CFT) programme sets out a reporting entity’s internal professionals to policies, assess the risk they may face to from themoney laundering and financing of terrorism and to manage and mitigate procedures and controls detect To confirm these details, documents such as your passport/ actions of moneythe launderers and people who finance risk of it occurring. The programme must be in writing and be licence based onoritsyour risk assessment. driver’s birth certificate, and documents that terrorism and must identify potentially suspicious activity. show your address such as a current bank statement will be Certain elements of a programme are specifically required by the Act, including: required.

• vetting Real seniorEstate managers and AML staff To make that assessment, Companies must training senior managers and AML obtain and verify• information from our clients.

Thisstaff is part of Under the new rules, if your property or business is held in • law customer due diligence, enhanced what the AML/CFT calls “customer dueincluding diligence” and isCustomer Due Diligence (CDD) and simplified CDD the name of a company, a trust, or has overseas ownership • reporting suspicious transactions a similar obligation to that imposed on banks and lawyers • monitoring and record keeping we’ll need specific information about the entity including who have been subject to this regime for some time now.

• monitoring and managing compliance with the AML/CFT programme. the people associated with it, (directors and shareholders, trustees and beneficiaries) and source of funds.

Risk-based systems and controls should be based on the nature, size and complexity of a reporting entity’s business, along with any money laundering and financing of terrorism risks it may face. (1) Why should we make these changes in our business?

Like any law, businesses and individuals are required to follow the legislation imposed by the government.

In addition, complying with the AML/CFT regime will make it harder for criminals to launder money and provides a significant disincentive to commit crime making New Zealand and the wider society a safer place. There is a societal benefit in complying with this law and is linked to our values of doing the right thing and people first. (3) What’s the easiest way for my sales business to ensure we are compliant?

It is imperative to attend salespersons training on the matter and work with your compliance officers if you need help understanding on AML/CFT. This FAQ is not a how to comply and will not remove the need for training. (3) Harcourts is the fastest growing and largest real estate group in New Zealand, with more than 790 offices accross ten countries along with more than 5,300 sales consultants and a growing property management team. Please visit www.teamharcourts.co.nz for more information.

5 ways to make your mortgage work for you Not all home loans are created equal. Different loan features can offer different benefits and limitations, and all the options can be confusing for some home buyers. Here are five ways to make your mortgage work for you, using different loan products.

1. Know what you’re signing up for It’s important to get a good understanding of the loan product you’re signing up to, and any limitations that might come along with it.

Loan products with limited features are often referred to as ‘basic loans’. Basic loans are attractive because they generally come with a lower interest rate, but can also include limitations like a maximum repayment threshold.

A maximum threshold means you may incur extra fees or charges if you want to pay off your loan faster.

On the other hand, a basic loan can be great for someone who wants to ‘set and forget’, because it only requires one easy and predictable repayment each month.

2. Pay it off faster with extra repayments This one might seem obvious – the more money you put towards your mortgage each month, the quicker you’ll pay it off. While it can be tempting to fork out just the minimum repayment amount each month, adding a little top-up can make a big difference in the long-term.

For example, let’s say you’ve got a $250,000 home loan at a rate of 7% p.a over 30 years. Paying an extra $50 each fortnight (on top of your minimum repayment) would see your mortgage paid off almost five years earlier.

If you get an unexpected bonus or inherit some money from a relative, you could also consider putting a lump-sum towards your mortgage.

3. Add value using a line of credit While your home’s worth may go up over time, it can be a good idea to consider what you could do to add value to the property like renovating or adding a garage.

You could apply for a line of credit to do this work. This is when your lender will approve an amount, which is secured against the equity in your home, and you can draw down the funds when you need it.

A line of credit is usually only available to those who have a relatively large amount of equity in their home. While having a line of credit can be helpful, it’s important to think carefully about how much you draw down, as it can extend your loan term.

While every effort has been made to ensure that the information in the publicaiton is accurate we recommend that before relying on this information you seek independent specialist advice.

4. Offset account An offset account is a savings or transactional account that’s been linked to your mortgage. When your lender calculates the amount you owe on your home loan, the balance of your nominated account can be used to offset this – meaning you’ll only pay interest on the difference.

Some lenders calculate this amount daily rather than monthly, which can often be the better option. If used smartly, an offset account could save you tens of thousands of dollars in interest over the life of your loan.

5. Take a repayment holiday Some lenders will allow you to take a repayment holiday – think of it like taking a break from paying back your mortgage. The criteria and timings vary from lender to lender. For example, if you’ve made extra payments to your loan in the past, you may be more likely to qualify.

A repayment holiday shouldn’t be confused with financial hardship, when you’re unable to pay your mortgage due to an unforeseen circumstance or emergency. If you’re facing problems financially, it’s important to speak to your lender as soon as possible.

Different loan products work for different people and circumstances, so do some research or work with your mortgage broker to find the one that’s best for you. https://www.realestate.co.nz/blog/tips-and-guides/5-ways-make-yourmortgage-work-you

Interest Rates Lender

Flt.

1yr

2yr

3yr

5yr

Kiwibank Kiwibank Special ASB Bank BNZ – Std, FlyBuys BNZ – Spec Classic ANZ

5.80 4.80 4.94 5.24 5.84 - 4.05 3.99 4.49 4..99 5.80 4.45 4.69 4.89 5.49 5.90 4.69 4.79 4.99 5.39 - 4.10 4.29 4.49 5.79 4.55 4.79 4.99 5.69

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0800 226 226

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