The New Zealand government is reopening the parent resident visa but with new requirements and capping number.

The parent resident visa, which enabled parents to join their adult children in New Zealand who have already been a New Zealand resident or citizen, was temporarily closed in 2016.

Now, the visa will reopen with new financial requirements that can only be met through the income of the sponsor and their partner.

A single person sponsoring one parent will increase from $65,000 a year to $106,000 a year, and, if sponsoring two parents, $159,000 a year.

Joint sponsors (for one parent) needs to earn $159,000 a year, and $212,000 a year if sponsoring two parents.

However, comparted to the New Zealand median salary of NZD $53,040, it seems to be very hard to achieve the new financial requirements.

That’s why in this week’s blog, our guest account manager in Zagga, Lorrie, discusses how their platform can work well for both investors and borrowers. This will give you an idea of how to make your funds work harder for you by investing in a higher-yield project, so that you can reach the new financial requirements and bring your parents to New Zealand soon.

Some people go to bank when they need a loan, and they are not sure if they are qualified from the perspective of bank. On the other hand, some people choose to invest in projects of low risks with low returns, or higher risks with higher returns.

Now everything is changing. Zagga, a New Zealand operated and owned company, offers alternatives for all. Zagga is a peer to peer platform which enables people to borrow money with more flexible criteria than New Zealand banks can offer. They are changing the way of borrowing money and investing. By providing borrowers with greater access to finance, investors receive attractive returns from interests.

How to increase income and reach the financial requirements of NZ parents resident visa?

How it works

For borrowers, the loan application process is easy, and assessment process is simple and transparent. Comparted to traditional New Zealand banks, Zagga take time to understand borrowers’ situation and borrowing needs and provide them with more flexible loan options.

Here are the steps of how Zagga works:

Step one: borrowers create an account, complete a loan application, and provide supporting documents from via Zagga platform.

Step two: credit assessors from Zagga evaluate the credit risk of the borrowers. Once approved, the loan information will be public via Zagga.

Step three: Investors get notification of investment opportunity by matching their investment risk preferences with credit risk of approved borrowers. Then, investors review relevant loan information, and choose to fund all or part of loan.

Step four: Once all of the borrower’s loan amount confirmed, investors transfer funds and borrowers get funded.

Why investing via Zagga might help you increase your income and reach the financial requirements of New Zealand parents resident visa?

By investing through Zagga platform, you invest in a higher-yield project, typically secured by a registered mortgage over the borrower’s property. Also, you receive regular monthly cash flow for the duration of the loan term, subject to the terms of the investment.

Investors can get attractive higher returns than bank deposits. For example, you have one million dollars cash in pocket. By investing through Zagga, your return on investments (ROI) can vary from 6% to 10%. Say the average ROI is 8%, then your interests income (before tax) is $80k annually, which is much higher than the deposit interests you generate from a bank.

If you are immigrants in New Zealand and plan to apply for resident visa for your parents, your interests income might help you reach the new income threshold.

How Zagga helps investors reduce investment risks?

Every loan is secured by a registered mortgage over property or assets.

Zagga fractionalises loans into $1,000 amounts which means investors can invest from as little as $1,000 to the full loan amount, depending on your investment risk appetite. Fractionalisation allows you to control your exposure to risk and to diversify your portfolio by investing smaller amounts across a variety of borrower types, loan purposes and terms. When all investors are committed to funding the borrowers, investors are not required to transfer their funds to borrowers directly.

Instead, each mortgage is individually registered in the name of Magna Trust Company Limited as trustee, with each investor recorded as a beneficiary for their fractional share of the loan and underlying security. Your investment funds are deposited into a dedicated trust account used specifically for funding the loan you elected to contribute towards.

What if borrowers can’t repay their loans, what will happen?

If the worst scenario happens that borrowers can’t repay their loan, Zagga will carry out mortgagee sale to repay their loans. But Lorrie mentioned that there hadn’t been a mortgagee sale up to now because Zagga’s credit managers work hard to control the risks for investors.

Interested in investing via Zagga? We can help you get in touch with their account manager and go through the registration step and other following steps, so that you can better understand how they can help you generate more income.

Here is Lorrie’s contact information: phone: 027 654 3039, 0508 158 158, or email: lorrie@zagga.co.nz 

Disclaimer: The content in this article are provided for general situation purpose only. To the extent that any such information, opinions, views and recommendations constitute advice, they do not take into account any person’s particular financial situation or goals and, accordingly, do not constitute personalised financial advice. We therefore recommend that you seek advice from your adviser before taking any action.

Prosperity Finance – here to help

Prosperity Finance looks at your loans strategically, empowering you to make the best long-term, informed decisions. We are professional mortgage brokers and are here to help. Give us a call today on 09 930 8999. 

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