Blog Post

Borrowing Money for the First Time?

Karen Poff • Jun 21, 2018

Borrowing Money for the First Time? Here’s a simple explanation of the process…


No matter how good you have been at saving there often comes a point in your life where you may need to borrow some money. There are many different reasons why you might need to borrow money but for your first time this might be to buy an asset like a fridge, a car or a house.


To start with the entity you are looking at borrowing money from, usually a main trading bank or a finance company (often called the lender) will need some personal information about you, firstly to confirm you are who you say you are and then for the lender to feel comfortable that you will be able to meet the terms of the loan that they give you, the most important thing to them being that you can pay the money back as and when you agree to.


The terms of the loan can vary but these include things such as how long you can borrow the money for, what the interest rate will be, how often you have to make repayments and how much each repayment is, and what will happen if you miss any payments (missing a payment is commonly known as default).


When you borrow money the lender often wants to take some form of protection over an asset that you own, or often the asset you are buying. This is commonly called taking security. The purpose of this security is so that the lender can take back the asset they have taken security against and use that to get the money they have loaned you back if you don’t meet the terms of the loan agreement, usually if you miss too many loan repayments.


As long as you are borrowing from an entity that is in the business of loaning people money, they are subject to some strict requirements under the Credit Contracts and Consumer Finance Act 2003, including an obligation to give you information about your loan on a regular basis (disclosure).


The two main types of security are a mortgage over land or a security over some kind of other asset that you own. Mortgage over land securities require your lawyer to be involved to complete registration of the mortgage against the Certificate of Title for the property you own on behalf of you and the bank.


Securities over any other kind of asset located in New Zealand, such as a fridge, car, or money in a bank account, are all registered on the Personal Property Security Register (PPSR) which is an internet based record maintained by the New Zealand Companies Office. Your lender can just register a security themselves without you needing to get legal advice and they usually include terms in the loan agreement that mean they don’t have to give you a copy of the security that they register or any other information about the security. This is particularly common for hire purchase type loans, such as a fridge or carpet.


Ward Adams Bryan-Lamb can assist you through all aspects of borrowing and the different types of security that your lender may require and for more detailed information in relation to any issue related to borrowing money please contact us through www.wardadams.nz or on facebook.

By Nicola McLeish 17 Aug, 2023
The partners are delighted to announce that Jonathon Amtmann has been promoted to Associate of the firm.
The Fencing Act
By Jonathon Amtmann 16 Aug, 2023
The Fencing Act 1978 (“the Act”) deals with boundary fences between neighbours. Read on to find out all you need to know when erecting a boundary fence.
By Roosje Rabusa 23 Nov, 2022
With the use of social media and online platforms becoming more and more prevalent in our daily lives, it is also becoming easier for people to use these platforms as a way to inflict psychological and verbal abuse or harm on other people. Individuals are now able to use online platforms to create fake profiles, post, threaten, and stalk people as a form of psychological harm. It is even becoming increasingly common for people to send messages by entering text into the reference box in a bank transfer. Individuals are becoming more creative, so it is important that we are aware of the risks of harm, and take the necessary steps to avoid such behaviour from continuing. Under the Family Violence Act 2018, such online behaviour may constitute “family violence” and an application to the Family Court for a Protection Order may be necessary. In order to make an application under this Act, you and the person exerting this harmful behaviour (the Respondent) must have been in a “family relationship”. The Respondent may be a current or previous spouse or partner, or a family member. You may wish to seek special conditions to be included in the Protection Order should the Court grant one. This may include that the Respondent must take all reasonable steps to remove harmful material about you from social media. If you are not in a “family relationship”, an application can be made in the District Court under the Harmful Digital Communications Act 2015. In contrast to an application under the Family Violence Act 2018, for an order to be granted under this Act, it must be satisfied that the other party had intention to cause you harm, and such communication would cause harm to a reasonable person and did cause you harm. If successful, the Court may make orders against the other party including taking down or disabling the material, ceasing or refraining from the conduct concerned, or publishing an apology. This Act is narrow and more targeted, and is not likely to result in quick or efficient redress compared to the Family Violence Act 2018. In any event, it is important that you put necessary measures in place to stop this behaviour from continuing including not sharing your passwords, disabling GPS tracking on online platforms, blocking others on social media, and making a complaint to the relevant agencies.
By Debbie Bryan-Lamb 12 Oct, 2022
Looking to buy your first home but having to rely on Mum and Dad to cough up some money? How would that work and what risks do you need to be aware of?
By Debbie Bryan-Lamb 27 Sep, 2022
Four important legal documents essential in most people’s lives include having a: • Will; • Enduring Powers of Attorney (Property and Personal Care and Welfare); • Family Trust; and • Relationship Property Agreement.
By Debbie Bryan-Lamb 07 Sep, 2022
Question – do you want to have peace of mind about what will happen to your property if you die or separate from your partner? If you answered “yes” then yes you definitely need a pre-nup agreement.
By Debbie Bryan-Lamb 03 Aug, 2022
If you are already living together as a couple or you are planning on moving in together, you need to get sound advice from an experienced lawyer specializing in relationship property matters. Right from the outset you need to understand the implications “living together” may have for your separate property rights.
By Jonathon Amtmann 27 Jul, 2022
The Wills Act 2007 sets out specific requirements Will documents must follow in order to be valid.
By Roosje Rabusa 10 Mar, 2022
When a partner or spouse acquires property from a third party by way of survivorship (or death), that property will be separate property.
By Roosje Rabusa 17 Feb, 2022
As a general rule, gifts between partners or spouses (known as “interspousal gifts”) are not classified as relationship property - unless such gifts are used for the benefit of both parties or that is the intention.
More Posts
Share by: