Geekzone: technology news, blogs, forums
Guest
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.


Filter this topic showing only the reply marked as answer View this topic in a long page with up to 500 replies per page Create new topic
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | ... | 18
531 posts

Ultimate Geek
+1 received by user: 345


  Reply # 2160173 13-Jan-2019 13:53
One person supports this post
Send private message quote this post

I think you need to find out more about what actual RBNZ policy you are in breach of.




4370 posts

Uber Geek
+1 received by user: 2494

Trusted
Lifetime subscriber

  Reply # 2160174 13-Jan-2019 13:55
Send private message quote this post

Geektastic:

 

OK. Here's an alternative plan.

 

 

 

1) Buy house with 25% deposit on floating rate loan

 

2) Go to bank the following day and use remaining "deposit" monies to pay off part of the loan

 

3) Fix the remainder as required

 

Then smile and tell bank to STFU...!

 

 

I wish it was that simple but the issue is disclosure!

 

That is what I said to my personal bank manager fine then make the deposit $1 under the 50% of this rule 

 

Cause I have disclosed the deposit amount I can't change my deposit amount

 

John


 
 
 
 




4370 posts

Uber Geek
+1 received by user: 2494

Trusted
Lifetime subscriber

Reply # 2160175 13-Jan-2019 13:56
Send private message quote this post

Journeyman:

 

I think you need to find out more about what actual RBNZ policy you are in breach of.

 

 

@Journeyman Correct I intend to and post an update here tomorrow

 

I have been on the RBNZ site and can't find this rule the Banks and Lawyer are talking about

 

John


488 posts

Ultimate Geek
+1 received by user: 6


  Reply # 2160181 13-Jan-2019 14:20
Send private message quote this post

Linux:

I wish it was that simple but the issue is disclosure!


That is what I said to my personal bank manager fine then make the deposit $1 under the 50% of this rule 


Cause I have disclosed the deposit amount I can't change my deposit amount


John



Sure you can. Just increase your offer to the vendor by $2!




pɐǝɥ sıɥ uo ƃuıpuɐʇs



4370 posts

Uber Geek
+1 received by user: 2494

Trusted
Lifetime subscriber

  Reply # 2160215 13-Jan-2019 14:26
Send private message quote this post

Filterer:
Linux:

I wish it was that simple but the issue is disclosure!


That is what I said to my personal bank manager fine then make the deposit $1 under the 50% of this rule 


Cause I have disclosed the deposit amount I can't change my deposit amount


John



Sure you can. Just increase your offer to the vendor by $2!


Still well over 50% deposit

John

Awesome
4841 posts

Uber Geek
+1 received by user: 1097

Trusted
Subscriber

  Reply # 2160216 13-Jan-2019 14:28
8 people support this post
Send private message quote this post

Something is being lost in translation here. There simply is no RBNZ rule that says banks cannot lend to you if you have too much deposit.

 

My guess is that is has to do with your gifted deposit. The new RBNZ rules require banks to lend no more than 65% of the purchase price to investors on all but a small percentage (5% I think) of their new loan book. Banks themselves have different rules about sources of deposits, and often treat gifts (especially recent ones) as 'non-genuine savings'. 

 

With the information you have given, I suspect your 'genuine savings' deposit is under 35%, which would hit the RBNZ LVR restriction for investment properties. This would *technically* make it true that is the RBNZ stopping the loan, but ultimately it is how your bank are treating your deposit that trips it. I see no other plausible explanation based on what you have disclosed.

 

Speak to a broker - as I mentioned, different banks have different rules and another may be more than happy to take your gifted deposit and count it under the RBNZ rules.





Twitter: ajobbins


Mad Scientist
19989 posts

Uber Geek
+1 received by user: 2712

Trusted
Lifetime subscriber

  Reply # 2160217 13-Jan-2019 14:36
Send private message quote this post

Linux:
Filterer:
Linux:

I wish it was that simple but the issue is disclosure!


That is what I said to my personal bank manager fine then make the deposit $1 under the 50% of this rule 


Cause I have disclosed the deposit amount I can't change my deposit amount


John



Sure you can. Just increase your offer to the vendor by $2!


Still well over 50% deposit

John


Nope.

Person who is approved a mortgage needs to have a history of saving money.

I presume 100% or close to it, if the 51% deposit was gifted.

Which means you have proven to the bank you had not managed to save $ over time.

I'm hypothesising that this is the reason for decline.




Swype on iOS is detrimental to accurate typing. Apologies in advance.




4370 posts

Uber Geek
+1 received by user: 2494

Trusted
Lifetime subscriber

  Reply # 2160222 13-Jan-2019 14:41
Send private message quote this post

Batman:
Linux:
Filterer:
Linux:

I wish it was that simple but the issue is disclosure!


That is what I said to my personal bank manager fine then make the deposit $1 under the 50% of this rule 


Cause I have disclosed the deposit amount I can't change my deposit amount


John



Sure you can. Just increase your offer to the vendor by $2!


Still well over 50% deposit

John


Nope.

Person who is approved a mortgage needs to have a history of saving money.

I presume 100% or close to it, if the 51% deposit was gifted.

Which means you have proven to the bank you had not managed to save $ over time.

I'm hypothesising that this is the reason for decline.


@Batman Have you not read my comments it's not the bank and how I have my own money invested earning me interest?

John

249 posts

Master Geek
+1 received by user: 49


  Reply # 2160230 13-Jan-2019 14:44
One person supports this post
Send private message quote this post

ajobbins:

 

Something is being lost in translation here. There simply is no RBNZ rule that says banks cannot lend to you if you have too much deposit.

 

My guess is that is has to do with your gifted deposit. The new RBNZ rules require banks to lend no more than 65% of the purchase price to investors on all but a small percentage (5% I think) of their new loan book. Banks themselves have different rules about sources of deposits, and often treat gifts (especially recent ones) as 'non-genuine savings'. 

 

With the information you have given, I suspect your 'genuine savings' deposit is under 35%, which would hit the RBNZ LVR restriction for investment properties. This would *technically* make it true that is the RBNZ stopping the loan, but ultimately it is how your bank are treating your deposit that trips it. I see no other plausible explanation based on what you have disclosed.

 

Speak to a broker - as I mentioned, different banks have different rules and another may be more than happy to take your gifted deposit and count it under the RBNZ rules.

 

 

 

 

I think you are correct. The facts are very hard to determine from this thread but I'm almost certain whatever the issue is because of the gift and/or the way the gift has been delivered and interpreted by an RBNZ policy plus the fact it's a rental. The proposed changes to tax laws will make the rental scenario less appealing as well (may not have been a consideration for the bank - but hopefully you've thought about it).

 

If this was a simple transaction where you had personally saved the 50% deposit and you were going to live in the home I doubt that there would be any issues. I am sure there are multiple ways around the current problem it will just come down to how to best construct the agreements with the bank, you and possibly your parents. 


3598 posts

Uber Geek
+1 received by user: 1517

Subscriber

  Reply # 2160232 13-Jan-2019 14:48
Send private message quote this post

Why would this rule be anything to do with AML?

Imagine I have 500K of dodgy money. I would get caught out If I try to use it to get a mortgage for a 700K house, but would get away with it if I get a mortgage for a 1.5 million house. Things would be even more stupid if it really is something to do with AML.







4370 posts

Uber Geek
+1 received by user: 2494

Trusted
Lifetime subscriber

  Reply # 2160234 13-Jan-2019 14:50
Send private message quote this post

I took a rental appraisal along with me when I went to the bank for the mortgage and they advised they don't need the rental appraisal as I can service the small mortgage no issues

I should make it clear I have well over 50% deposit

John

Fork 'Andles
3319 posts

Uber Geek
+1 received by user: 1080

Subscriber

  Reply # 2160235 13-Jan-2019 14:54
Send private message quote this post

ajobbins:

Something is being lost in translation here. There simply is no RBNZ rule that says banks cannot lend to you if you have too much deposit.


My guess is that is has to do with your gifted deposit. The new RBNZ rules require banks to lend no more than 65% of the purchase price to investors on all but a small percentage (5% I think) of their new loan book. Banks themselves have different rules about sources of deposits, and often treat gifts (especially recent ones) as 'non-genuine savings'. 


With the information you have given, I suspect your 'genuine savings' deposit is under 35%, which would hit the RBNZ LVR restriction for investment properties. This would *technically* make it true that is the RBNZ stopping the loan, but ultimately it is how your bank are treating your deposit that trips it. I see no other plausible explanation based on what you have disclosed.


Speak to a broker - as I mentioned, different banks have different rules and another may be more than happy to take your gifted deposit and count it under the RBNZ rules.



As another former banker I believe that every part of this post is correct. As more details come to the surface we are getting closer to a projected correct answer - hopefully to be confirmed tomorrow.

I have just spent quite some time googling to find any references to RBNZ and regs on gifted deposits. There are none.

As @ajobbins says, different banks treat gifts in different ways - and many have changed their policies in recent years as Bank of Mum and Dad has become more prevalent. Some will allow gifts as part of the equity deposit provide the donors complete a certificate or declaration addressed to the bank confirming it’s a gift and not a loan. What they are trying to avoid is okaying a loan where the debt servicing burden is OK on the bank debt but not OK on the total debt (I.e. including the parents’ loan).

Despite all that, I bet it’s the more stringent 5% cap on new loans with LVR higher than 70% on non-owner occupied property that is in play here.

4435 posts

Uber Geek
+1 received by user: 1356
Inactive user


  Reply # 2160238 13-Jan-2019 15:01
Send private message quote this post

Linux:

 

My parents were born in Wellington and Levin 

 

 

 

John

 

 

 

 

There's you problem! wink

 

 

 

Hope they sort it for you tomorrow John, best of luck. 


mdf

2190 posts

Uber Geek
+1 received by user: 671

Trusted
Subscriber

  Reply # 2160239 13-Jan-2019 15:01
One person supports this post
Send private message quote this post

You've obviously got the right course of action planed, i.e. consulting an expert in the area to actually provide conclusive advice.

 

At the risk of offering my two cents on an (at best) semi-informed basis, I suspect that the "new rules" cited are probably the new property investor rules (making lending to investors harder) rather than new the owner-occupier rules (trumpeted as making lending easier). From the RBNZ's press release:

 

Up to 5 percent of new mortgage loans to property investors can have deposits of less than 30 percent (lowered from 35 percent).

 

That is a big drop and it might be that your bank is already pushing the limits of property investor lending.

 

There are existing rules about anti-avoidance and third party lending in BS19. None of these directly deal with family gifting situations, but I wouldn't be surprised to find out that either the bank's internal policies or some guidance (or possibly even an accounting standard) raised some flags.

 

If that is the case (and that is a big if), I suspect that the +/- 50% thing might be a red herring. But I'm only guessing.

 

The detailed rules for this stuff are in (depending on your bank), BS2A and BS2B. But I doubt anyone except a banking prudential expert could wring any sense at all out of those!


Awesome
4841 posts

Uber Geek
+1 received by user: 1097

Trusted
Subscriber

  Reply # 2160241 13-Jan-2019 15:12
Send private message quote this post

mdf:

 

Up to 5 percent of new mortgage loans to property investors can have deposits of less than 30 percent (lowered from 35 percent).

 

That is a big drop and it might be that your bank is already pushing the limits of property investor lending.

 

 

Banks can lend to as many investors as they want, as long as the investor has > 30% deposit/equity. The 5% speed limit only applies to deposits less than this amount. OP could be impacted by the speed limit if they aren't counting his deposit towards the 30% required, but otherwise I can't see any other rule that would be in play here.





Twitter: ajobbins


1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | ... | 18
Filter this topic showing only the reply marked as answer View this topic in a long page with up to 500 replies per page Create new topic



Twitter »

Follow us to receive Twitter updates when new discussions are posted in our forums:



Follow us to receive Twitter updates when news items and blogs are posted in our frontpage:



Follow us to receive Twitter updates when tech item prices are listed in our price comparison site:





News »

Orcon announces new always-on internet service for Small Business
Posted 18-Apr-2019 10:19


Spark Sport prices for Rugby World Cup 2019 announced
Posted 16-Apr-2019 07:58


2degrees launches new unlimited mobile plan
Posted 15-Apr-2019 09:35


Redgate brings together major industry speakers for SQL in the City Summits
Posted 13-Apr-2019 12:35


Exported honey authenticated on Blockchain
Posted 10-Apr-2019 21:19


HPE and Nutanix partner to deliver hybrid cloud as a service
Posted 10-Apr-2019 21:12


Southern Cross and ASN sign contract for Southern Cross NEXT
Posted 10-Apr-2019 21:09


Data security top New Zealand consumer priority when choosing a bank
Posted 10-Apr-2019 21:07


Samsung announces first 8K screens to hit New Zealand
Posted 10-Apr-2019 21:03


New cyber-protection and insurance product for businesses launched in APAC
Posted 10-Apr-2019 20:59


Kiwis ensure streaming is never interrupted by opting for uncapped broadband plans
Posted 7-Apr-2019 09:05


DHL Express introduces new MyDHL+ online portal to make shipping easier
Posted 7-Apr-2019 08:51


RackWare hybrid cloud platform removes barriers to enterprise cloud adoption
Posted 7-Apr-2019 08:50


Top partner named at MYOB High Achievers Awards
Posted 7-Apr-2019 08:48


Great ideas start in Gisborne with hackathon event back for another round
Posted 7-Apr-2019 08:42



Geekzone Live »

Try automatic live updates from Geekzone directly in your browser, without refreshing the page, with Geekzone Live now.


Support Geekzone »

Our community of supporters help make Geekzone possible. Click the button below to join them.

Support Geezone on PressPatron



Are you subscribed to our RSS feed? You can download the latest headlines and summaries from our stories directly to your computer or smartphone by using a feed reader.

Alternatively, you can receive a daily email with Geekzone updates.