How did Adam and Nicole get started?
Adam and Nicole live in Ashburton, where Nicole runs a chiropractic clinic, and Adam does seasonal work.
They bought some land and built their family home in 2019. Once the property was built, it had around $300,000 in equity.
They used the No Cash Needed Method, using that equity as the deposit for their first rental. They bought in 2022 for around $370,000, and quickly followed it up with a second investment property.
But they hit a roadblock when trying to buy their third rental. The bank said no.
After speaking to a mortgage adviser, they found two things holding them back:
#1 – They were paying off their mortgage ‘too quickly’
The couple had a big goal. They wanted to pay off their family home before Nicole turned 40.
That’s why they’d set up their mortgage so they’d pay it off in just seven years. That meant large mortgage repayments.
Now, paying off debt often puts homeowners in a strong position.
But, in this case, it also came with a hidden downside.
Their large mortgage repayments were so large that they made it harder to borrow money for another investment property.
So they booked a Wealth Plan meeting with Opes Partners.
At the time, Nicole wondered whether the meeting would be worth it. She thought: "We don't think we can actually do anything. This might be a waste of time."
But their Opes Partners financial adviser saw options they hadn't considered.
He introduced them to a mortgage adviser, who suggested extending their mortgage term from 7 years to 30.
That would lower their minimum repayments. So, in the bank’s eyes, they could then borrow more.
Nicole wasn't convinced at first.
"That took a while for me, especially to get my head around," she says.
After all, they'd spent years trying to get rid of debt, not extend it.
But extending the documented loan term didn't mean they had to pay off their mortgage more slowly. Instead, it just reduced their minimum repayment. They could always keep making extra repayments.
This meant they could still pay off their mortgage faster, while borrowing more.
But there was another barrier holding them back.
