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378 posts

Ultimate Geek
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  Reply # 2161142 14-Jan-2019 19:29
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mudguard:

 

tdgeek:

 

mudguard:

 

 

 

And as I've said before, it would be worth asking the bank for a direct answer. And then finding out how long you need to hold the gift for. 

 

 

Doesn't the gift need to be certified? That means its a gift, no payback liability for the bank to worry about. As good as cash.

 

 

The point I'm making is that the bank knows (and they will work out if it isn't clear) that John in this case, hasn't saved that money. So they will be assessing the application based on the money he has saved.

 

I don't recall the certification process, I vaguely recall a gift couldn't be anymore than 10% of the deposit. But this may have changed. It is still not clear how much John is putting in, and he may not want to disclose that. I know some have argued that the money is now his and he can do what he wants with it, I'm not trying to be argumentative, but the bank I worked for didn't view gifts the same way.

 

If the house he is looking to buy is $500k, then I'm guessing the bank will want to see at least $100k (owner occupied) saved by John to go towards the application.

 

 

My sister was gifted 45% of her deposit from my parents and scraped above the 20% requirement and it was approved so it must be more than 10% :) 


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Ultimate Geek
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  Reply # 2161152 14-Jan-2019 20:03
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eracode:
logo: The bank has to give approval to allow a second mortgage.

It is not allowed to give an approval if the combined lending (bank + other lender) exceeds the lvr restrictions .

It's unlikely this is the case in this scenario as a) I read the deposit is a gift and b) family don't often take second mortgages for family loans


Yes - now I see clearly you’re correct - if there’s a second mortgage the second debt does get counted in the LVR calculation. I was wrong on that point and stand corrected - my apologies.

No excuses but I don’t recall that from my days as as a banker (retired five years ago). Maybe it’s new as part new RBNZ regs - or maybe it was always there and I was ignorant of it.

 

 

 

It's been there since day 1 when the 60% LVR for rentals came in. It was to stop second tiers funding the balance (e.g. 60% by the bank, 20% by a finance company). It's not really common knowledge though as in reality second ranked mortgages are pretty rare when a bank has the first mortgage.

 

 

 

Some of BS19 stuff can be quite confusing to work out especially with multiple entities and business partners all guaranteeing business loans, those same partners guaranteeing other entities etc... and the like. Then there's the allowable exemptions (construction loan, bridging loan, refinances). 

 

 

 

Anyway, this is not relevant to this thread/post. I suspect the OP's bank has got it wrong (and there's not way the CEO would have been involved in this - maybe a regional manager at the best)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 
 
 
 




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  Reply # 2161255 15-Jan-2019 06:40
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Here is the latest emails between me and the bank manager! If anyone can make sense of the response please enlighten me

 

Email from me to Bank manager

 

Hi xxxxxx

 

Have just had confirmation from reserve bank and Andrew little that gifted money for a house purchase for investment has no upper limit only a lower limit of 30% and was changed recently from 35% deposit

 

Can you please call me 

 

thanks

 

John

 

Email response from Bank Manager

 

Hi John

 

The deposit for an investment property has been changed from 35% to 30%.

 

30% deposit and 70% borrowings this does not relate to gifting.

 

Hopefully your solicitor has made this clear to you regarding the rules of gifting rather than deposit and borrowings.

 

Regards

 

My solicitor and parents solicitor are both confused and have no idea what the bank manager is on about as gifted money is my money and I can do with it what I like the same as what the Reserve bank said

 

John

 

 




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  Reply # 2161259 15-Jan-2019 06:59
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When I spoke to the staff member at the Reserve bank he was even left scratching his head, I went over everything in fine detail

 

1) Purchase price

 

2) Gift deposit (about 65%) of house purchase price

 

3) Investment property (Going to rent it out)

 

4) How much money I have in the bank (rather not say sorry) but if I had no job tomorrow and house was not rented out I could still pay the mortgage for well over a year and still go on overseas holidays and keep the lift style I have today

 

5) All my debts that total $0.00

 

6) My credit history / score is spotless

 

John


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  Reply # 2161262 15-Jan-2019 07:33
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Again, I don't think this has anything to do with the Reserve Bank or Andrew Little. Something in the bank's system is declining your application. His email still makes it seem like the gift is an issue. 

 

And it sounds like your personal deposit contribution is zero? What if you offered some of your savings towards it as well?


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  Reply # 2161263 15-Jan-2019 07:35
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Linux:

 

Here is the latest emails between me and the bank manager! If anyone can make sense of the response please enlighten me

 

Email from me to Bank manager

 

Hi xxxxxx

 

Have just had confirmation from reserve bank and Andrew little that gifted money for a house purchase for investment has no upper limit only a lower limit of 30% and was changed recently from 35% deposit

 

Can you please call me 

 

thanks

 

John

 

Email response from Bank Manager

 

Hi John

 

The deposit for an investment property has been changed from 35% to 30%.

 

30% deposit and 70% borrowings this does not relate to gifting.

 

Hopefully your solicitor has made this clear to you regarding the rules of gifting rather than deposit and borrowings.

 

Regards

 

My solicitor and parents solicitor are both confused and have no idea what the bank manager is on about as gifted money is my money and I can do with it what I like the same as what the Reserve bank said

 

John

 

 

I'm coming to the conclusion that its likely you are going to need a new bank.....




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  Reply # 2161264 15-Jan-2019 07:37
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Geektastic:

 

Linux:
eracode:
Linux:

 

Just got off the phone from the bank manager and it's 100% reserve bank and they still can't proceed

 

John

 



@Linux Do you understand what the rule is that’s blocking this and can you pass it on to us?


Gifting of money for deposit

John

 

So how long do you have to possess the money before it is just part of your finances and not a gift? Will it still be a gift in, say, 5 years time?

 

 

@Geektastic Once gifted it's mine to do what I want with it, This is the reason why I have a gift cert signed by my parents

 

John

 

 




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  Reply # 2161265 15-Jan-2019 07:39
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mudguard:

 

Again, I don't think this has anything to do with the Reserve Bank or Andrew Little. Something in the bank's system is declining your application. His email still makes it seem like the gift is an issue. 

 

And it sounds like your personal deposit contribution is zero? What if you offered some of your savings towards it as well?

 

 

@mudguard I offered to change it around and use my own money and gifted but the bank says it can't be changed to disclosure

 

John




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  Reply # 2161266 15-Jan-2019 07:40
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@wellygary Correct that is happening this morning and the new bank have advised it will be sorted ASAP

 

John


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  Reply # 2161267 15-Jan-2019 07:42
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you need to get a straight answer out of someone as to what the issue is.


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  Reply # 2161268 15-Jan-2019 07:43
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This has never been a Reserve Bank issue.

 

ASB simply don't want you as a customer - build a bridge and move on to somebody who does.

 

 




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Reply # 2161269 15-Jan-2019 07:44
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Jase2985:

 

you need to get a straight answer out of someone as to what the issue is.

 

 

@Jase2985 That is easier said than done! I am just the Twat stuck in the middle

 

Heading to new bank this morning opening a bank account and moving my money over

 

John


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  Reply # 2161276 15-Jan-2019 08:19
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As I said earlier, I can't help thinking there's more to this than meets the eye - or something we are not aware of - perhaps in the background somewhere.

 

On bare facts it doesn't add up.


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  Reply # 2161281 15-Jan-2019 08:47
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Linux:

Geektastic:


Linux:
eracode:
Linux:


Just got off the phone from the bank manager and it's 100% reserve bank and they still can't proceed


John




@Linux Do you understand what the rule is that’s blocking this and can you pass it on to us?


Gifting of money for deposit

John


So how long do you have to possess the money before it is just part of your finances and not a gift? Will it still be a gift in, say, 5 years time?



@Geektastic Once gifted it's mine to do what I want with it, This is the reason why I have a gift cert signed by my parents


John


 



Indeed. So there's actually no issue. It's verging on the ridiculous.
My advice is just walk to another bank or use a broker. Your time is valuable and they are wasting it.







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  Reply # 2161284 15-Jan-2019 08:56
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eracode:

 

As I said earlier, I can't help thinking there's more to this than meets the eye - or something we are not aware of - perhaps in the background somewhere.

 

On bare facts it doesn't add up.

 

 

@eracode Do you live close to Milford? You are more than welcome to pop over and have a look over everything

 

Will even show you my personal bank account balance and this is my money I have saved not related to the gift

 

John


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