Getting a mortgage with over 50% deposit headache (but Approved by BNZ!)

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Forums › Finance and wealth management › Getting a mortgage with over 50% deposit headache (but Approved by BNZ!)

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Ultimate Geek
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#2162211 16-Jan-2019 19:38

networkn:

Boo to ASB. We were reconsidering approaching them when we switch banks shortly, now not so much.

It was a dealing similar to this (not mortgage related) that had us remove all our banking from them in the first place.

Yeah bizarre service from ASB for the OP.

That said I have been very happy with ASB since we moved 5 or so years ago from Westpac who just would not match the market @ renewal time - better rates / better deal (cash incentive/no fees ets) / better service.

But clearly YMMV.

Good you got it sorted Linux.

Geektastic

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#2162222 16-Jan-2019 19:50

Good job.

Banks can be weird. I did a wire transfer to a company in the US to a US bank in respect of travel services they were providing me in Burma/Myanmar.

I put that in the Notes field and next day got a call telling me I couldn't send money to Myanmar.

I patiently explained that I wasn't doing that, I was sending it to San Francisco to a US company. We went round in circles and the numpty at the bank couldn't cope.

I cancelled the transfer and redid it the next day identically but omitting the Myanmar reference and it went straight through...

Dratsab

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#2162226 16-Jan-2019 19:54

Excellent news - huge congratulations John!!

blakamin

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#2162308 16-Jan-2019 21:14

Yaay! Party at yours! Congrats! I know how stressful mortgage-gone-wrong crap can be.

When we sold our old house, we went to the same bank for our new mortgage (we had pre-approval for 40k more than the house we finally bought) reliant on selling our existing property.. the same person in fact, because we're a bit loyal/stupid like that... then the crap started.

Basically we sold our existing house for $60k more than we bought it for and $50k more than the bank thought it would go for, and the new house was waay less than our original mortgage. And then the bad news... "they" wouldn't lend that to us after it was approved, without us basically handing them the whole $60k we made (plus our actual deposit).

We went to a mortgage broker that was recommended to us, out of desperation.

Turned out the bank mortgage lady was trying to get more commission and setting up a completely new mortgage without even mentioning a mortgage transfer was possible, and lied about our pre-approval by telling us we were approved for $50k more than she applied for (we have the original numbers in writing, telling us the exact figure we could spend on the new house when we found one).. Broker sorted a mortgage transfer and saved all sorts of BS, and about $48k (after stamp duty and other govt fees).

Lets just say when our fixed term is over, that bank will be losing us (and all our accounts) and the broker that helped us out (for a bottle of nice whiskey) will have a new client!

premiumtouring

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#2162385 17-Jan-2019 08:00

coffeebaron:

networkn:

Boo to ASB. We were reconsidering approaching them when we switch banks shortly, now not so much.

It was a dealing similar to this (not mortgage related) that had us remove all our banking from them in the first place.

I've always rated @asbbank highly, so this is a bit disappointing.

Yep, exactly what I was thinking after reading this ordeal. Shame on ASB.

Linux

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#2162387 17-Jan-2019 08:22

Here is a copy and paste of the last email from the branch 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

(removed name)
Branch Manager

My solicitor and my parents solicitor could not work out what she meant they just said change banks

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Earbanean

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#2162400 17-Jan-2019 08:52

Linux:

Here is a copy and paste of the last email from the branch 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.

I would not read from this that ASB are saying you were turned down due to RBNZ rules. They are saying that the RB have reduced the required deposit from 35% to 30% for investment properties. Which is correct. Then separately they are saying that this does not affect their own rules around gifting of deposits, which is why you were not approved.

In other words they're saying even though the RBNZ have reduced their depo requirements, that doesn't help you with their depo gifting (and therefor debt serviceability) requirements.

But it seems this was fairly badly communicated. Emails are often a bad way to discuss these things.

Dratsab

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#2162401 17-Jan-2019 08:53

Do banks do random drug testing on their employees, especially branch managers?

I actually think what she's trying to say here is that at the minimum you should have is 30% "savings" and the balance should be made up by borrowing from the bank. The key word being savings not gifting.

Drilling into that a little further in case I'm being a bit obscure as well, I believe she's thinking that because the money is gifted there are no savings, because there's no savings you don't meet the criteria set by the RBNZ, therefore she can decline your application and blame the RBNZ. It's a strict application of that particular word with no room for common sense, accompanied by extremely poor communication skills.

Linux

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#2162405 17-Jan-2019 09:01

Earbanean:

Linux:

Here is a copy and paste of the last email from the branch 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.

I would not read from this that ASB are saying you were turned down due to RBNZ rules. They are saying that the RB have reduced the required deposit from 35% to 30% for investment properties. Which is correct. Then separately they are saying that this does not affect their own rules around gifting of deposits, which is why you were not approved.

In other words they're saying even though the RBNZ have reduced their depo requirements, that doesn't help you with their depo gifting (and therefor debt serviceability) requirements.

But it seems this was fairly badly communicated. Emails are often a bad way to discuss these things.

@Earbanean Sorry I did not record the phone conversations but the bank manager spoke to me directly and my Mum and she made it very clear it was due to RBNZ rules and not the bank

John

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#2162424 17-Jan-2019 09:46

Dratsab: Do banks do random drug testing on their employees, especially branch managers?

I actually think what she's trying to say here is that at the minimum you should have is 30% "savings" and the balance should be made up by borrowing from the bank. The key word being savings not gifting.

Drilling into that a little further in case I'm being a bit obscure as well, I believe she's thinking that because the money is gifted there are no savings, because there's no savings you don't meet the criteria set by the RBNZ, therefore she can decline your application and blame the RBNZ. It's a strict application of that particular word with no room for common sense, accompanied by extremely poor communication skills.

@Dratsab The Reserve Bank and Andrew little (The Politician) confirmed no such rules on the RBNZ side, I made it very clear that the deposit was gifted and can spend it on what I like and will never have to repay the gift (I could of gone to Vegas and had one hell of a week with it if I wanted)

John

Earbanean

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#2162429 17-Jan-2019 09:52

Linux:

@Earbanean Sorry I did not record the phone conversations but the bank manager spoke to me directly and my Mum and she made it very clear it was due to RBNZ rules and not the bank

Well she was wrong and either didn't understand, or badly miscommunicated, the reasons for the denied approval. The decision would have been made by a Credit Approval officer/team, not her. She was just passing on the decision - very badly.

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#2162476 17-Jan-2019 11:16

Earbanean:

Linux:

Here is a copy and paste of the last email from the branch 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.

I would not read from this that ASB are saying you were turned down due to RBNZ rules. They are saying that the RB have reduced the required deposit from 35% to 30% for investment properties. Which is correct. Then separately they are saying that this does not affect their own rules around gifting of deposits, which is why you were not approved.

In other words they're saying even though the RBNZ have reduced their depo requirements, that doesn't help you with their depo gifting (and therefor debt serviceability) requirements.

But it seems this was fairly badly communicated. Emails are often a bad way to discuss these things.

I also read the email from the banker and also looked on the RBNZ website and no where does it mention what OP has been declined for. I also put the question to a well known mortgage broker who also said no such ruling. The banker is quoting the recent deposit had been reduced from 35% to 30% which does not account for the deposit. ASB don't know what they are talking about in this situation. My thoughts are they just didn't want to do business as the bank loan was quite low by todays standards. Good old BNZ for coming to the rescue. I have never had issues with them and have had all my old mortgages with them.

tdgeek

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#2162506 17-Jan-2019 11:54

I mentioned earlier about the level of lending a bank can make, based on its assets. (Maybe liquid assets, maybe a combination) @ajobbins confirmed this is true. Its a RBNZ rule

If ASB was at this limit it couldn't lend right now. If it was near this limit, or was near enough that it needed to provide other "more worthy" borrowers (first home etc), then the RBNZ rule is all or part of it. Its a stretch to blame them as ASB did, but you would have to think if the ASB had funds available to lend, it would lend them. I suspect this was the issue.

They could not say we don't have any money left :-). They could say as we are so popular we have reached the lending limit at the moment, can you call us in 2 weeks?

The comms were very poor, but clearly ASB cannot lend to John right now, and has fudged excuses why not.

eracode

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#2162540 17-Jan-2019 13:04

thecatsgoolies:
Earbanean:

Linux:

Here is a copy and paste of the last email from the branch 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.

I would not read from this that ASB are saying you were turned down due to RBNZ rules. They are saying that the RB have reduced the required deposit from 35% to 30% for investment properties. Which is correct. Then separately they are saying that this does not affect their own rules around gifting of deposits, which is why you were not approved.

In other words they're saying even though the RBNZ have reduced their depo requirements, that doesn't help you with their depo gifting (and therefor debt serviceability) requirements.

But it seems this was fairly badly communicated. Emails are often a bad way to discuss these things.

I also read the email from the banker and also looked on the RBNZ website and no where does it mention what OP has been declined for. I also put the question to a well known mortgage broker who also said no such ruling. The banker is quoting the recent deposit had been reduced from 35% to 30% which does not account for the deposit. ASB don't know what they are talking about in this situation. My thoughts are they just didn't want to do business as the bank loan was quite low by todays standards. Good old BNZ for coming to the rescue. I have never had issues with them and have had all my old mortgages with them.

Yes - I’m becoming more convinced that for some reason ASB did not want this business. There is something more to this whole thing because it really just doesn’t make sense.

Sometimes I just sit and think. Other times I just sit.

mudguard

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#2162543 17-Jan-2019 13:09

I'm still betting they've used the RB as an excuse and have declined the application based on John not putting any of his savings in.
What is always interesting in these situations is what BNZ will have made with ASB's credit check.
Usually it prompts a question asking what the result of the first bank's application.
But it could be BNZ have no gifting rules. My only experience is with another bank who still refer to it in their terms.

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