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Artificial intelligence (AI) is already here!


Believe it or not, when you apply to some banks now for your home loan, it's not a human being who decides whether or not you are approved. It's a computer!

Based on the information entered into the computer it measures literally hundreds of indicators using algorithms and decides whether you are approved or declined. That's it! No ifs or buts, you're in or out!

Our world is rapidly breaking into two types of actions - Transactions and Advice. You either make your own decisions and obtain what you want online, or if you're not sure, you talk to someone and seek advice.

Transaction versus Relationship!

Like a supermarket - you can choose to self check if you're confident and understand the system, or you can go to the checkout and talk to someone. They'll do the checking and packing for you.

So what does that mean when you want to borrow money for a mortgage? It's not that hard to apply online, provide the information requested and wait till the computer likes you or not, and maybe get your approval. However most mortgages are spread over 30 years. Over that time the accrued interest could exceed the value of the property you purchased - depending on interest rates over the period of the loan.

Example:-

Property value = $400,000

A 30 year mortgage at current rates with an estimated average rate of 5.0%

Repayments are $1,610.00 monthly

Interest accrued over the period is $279,767

Total loan cost is $579,767

So how could you reduce that cost? obviously you can reduce the repayment term by paying more, but how much more - and what can you afford?

One thing you can do is consult an independent lending specialist who can advise on a structure that suits your situation and personal circumstances.

Mortgage Advisers are generally in the mortgage business for the long term and most make themselves available for ongoing support and advice at no cost. So it's a "no brainer" to form a relationship with an adviser you like - someone you feel you can trust, who's there when you need advice to make sure you make good financial decisions for the future.

Want to know more?

Contact Jerome (03) 281 8605 or jerome@thompsonmcneill.co.nz


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