HGH - Heartland Group Holdings

[Basil]

Thanks Shareguy.  Lots of juicy fees in there on top of the 10.5% interest rate.  Looks highly lucrative 

[Bev]

As a matter of interest -

Heartland's variable interest rate on reverse mortgages in NZ is 10.5%pa

Australian Govt advertising reverse mortgages, to approved Au. pensioners, at 3.95%pa.

[winner (n)]

The calculator is interesting

Couple and youngest one aged 70 take on 30% of $1m house ...ie mortgage $300,000

Calculator says after 10 years equity likely to be $490,000 ....after property increases in value

After 16 years your $300,000 mortgage has grown to $1,600,000 and if you are lucky that's what the house is worth ....after that it seems you get further and further into debt and probably hope that Heartland won't kick you out and make you homeless.

https://www.heartland.co.nz/reverse-mortgage/reverse-mortgage-calculator#

[Waltzing]

lets hope for investors they have an accurate financial model for how much they require to cap raise to balance the required growth in lending (RVM) to balance increasing divides and SP .....

[BlackPeter]

As a matter of interest -

Heartland's variable interest rate on reverse mortgages in NZ is 10.5%pa

Australian Govt advertising reverse mortgages, to approved Au. pensioners, at 3.95%pa.

You forgot to mention that the lending conditions are quite different - the Govt mortgages might have lower interest rates, but there are just many things they won't give you any money for.
Costs for House renovations? - HGH - yes, Government - NO
Costs for an important surgery? HGH - yes, Government - no
Need money for an overseas travel to visit the family? HGH - yes, Government - NO.

... the list of things for which the government Reverse Mortgage does not pay is endless, it basically only can be used for some modest increase of ones monthly pension. Anybody needing a lumpsum needs to go to HGH or they just won't get the money.

Not sure either about the repayment conditions for the government loans - HGH's conditions are extremely flexible. What about the government?

Anyway - looking at the growth rate of HGH's Australian loan book (17.8% CAGR since 2020, check page 28 of their recent investor presentation) it looks like that there are enough customers who understand the benefits of the HGH Reverse Mortgage. Can't make everybody happy, can they?

[BlackPeter]

The calculator is interesting

Couple and youngest one aged 70 take on 30% of $1m house ...ie mortgage $300,000

Calculator says after 10 years equity likely to be $490,000 ....after property increases in value

After 16 years your $300,000 mortgage has grown to $1,600,000 and if you are lucky that's what the house is worth ....after that it seems you get further and further into debt and probably hope that Heartland won't kick you out and make you homeless.

https://www.heartland.co.nz/reverse-mortgage/reverse-mortgage-calculator#

Looks like you didn't read the conditions, didn't you?

This is taken from the same website:

We take our duty of care seriously and have a range of safeguards in place to ensure you make an informed decision and are well protected*.

Lifetime occupancy promise
You continue to own and live in your home for as long as you choose.

No negative equity guarantee
The amount required to repay the loan will never exceed the net sale proceeds of the property.

Loan repayment promise
You do not need to make any loan repayments until the end of the loan. Although you can choose to make repayments at any time with no penalty.

As you easily can see - the bank can't kick the owners out - no matter whether the loan sum is growing above the house value. All the bank will get at the end is whatever the house is worth when the residents / owners die.

No need to hope for the banks mercy ;

[BlackPeter]

What would be good to know is the number of mortgages there are and how many new ones and how many paid out

Not sure I see the relevance of the number of mortgages. Interesting is the sum of money they loaned out.

Page 27 and 28 of their investor presentation https://api.nzx.com/public/announcement/437072/attachment/426005/437072-426005.pdf
provide plenty of data in that regard.

[Bev]

You forgot to mention that the lending conditions are quite different - the Govt mortgages might have lower interest rates, but there are just many things they won't give you any money for.
Costs for House renovations? - HGH - yes, Government - NO
Costs for an important surgery? HGH - yes, Government - no
Need money for an overseas travel to visit the family? HGH - yes, Government - NO.

... the list of things for which the government Reverse Mortgage does not pay is endless, it basically only can be used for some modest increase of ones monthly pension. Anybody needing a lumpsum needs to go to HGH or they just won't get the money.

Not sure either about the repayment conditions for the government loans - HGH's conditions are extremely flexible. What about the government?

Anyway - looking at the growth rate of HGH's Australian loan book (17.8% CAGR since 2020, check page 28 of their recent investor presentation) it looks like that there are enough customers who understand the benefits of the HGH Reverse Mortgage. Can't make everybody happy, can they?

Thank you Black Peter.

  Actually, I see HGH provided a glossary at the end of the presentation to help those of us who are challenged by some of the accounting language.

[Waltzing]

once you have the money .. and you invest it in mining on mars with elon will HGH know ?



 

[BlackPeter]

once you have the money .. and you invest it in mining on mars will HGH know ?

elon will only accept BC if you want to invest in his new mining company on Mars...

now you may say this is silly... but the production shed for knocking out star lifters is !00 a year...

thats right you read it correctly... 100 big rockets to take stuff up into space.. a year... just to start with...

I doubt they (HGH) would mind if you really want to throw your loan money away ... as long as you don't transfer their security to the Mars as well

Having said that ... any of Musks investments are at best a play for traders specialised in exploiting the bigger fool theory, and I recon he is now with all of his investments well past the hype peak. He has a lot of similarities with his buddy Trump, and he could as well easily commit suicide just by jumping from the height of his ego down to his IQ level ;

Anyway - better go back to HGH, shall we?

[Forrestdun]

I wonder if Heartland has decided to get out of homeloan mortgages, they haven't adjusted any rates for long time and now have some of the highest rates in the sector.

[lorraina]

Thank goodness.
Waste of good capital.
Better margins elsewhere.

[LoungeLizard]

Thank goodness.
Waste of good capital.
Better margins elsewhere.

Motor car loans for example?

[lorraina]

1957
MARAC Finance opens to support the growth of small to medium sized businesses.

Been core business of HGH since PGC days.

[Forrestdun]

Thank goodness.
Waste of good capital.
Better margins elsewhere.

If you mean motor and assets they have been provisioning lots of losses, think I would prefer lower margin with pretty much no losses.