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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#2160033 13-Jan-2019 11:10

Linux:

mudguard:
Linux:

The bank has zero issue with my application and happy I can service the small mortgage, I have zero debt and also my own money in the bank and my income could service a much bigger home loan

John

Then you need to ask them what you can do in the future to reapply. What percent of the deposit is your own money?

In theory 100% of the deposit is my own money if I wanted to I could spend it on Coke and hookers and can prove where the money came from

Just cause it was a gift should not matter

John

Is there any possibility that the bank considers the 'gift' component as a de-facto loan dressed up as deposit?

mudguard

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#2160034 13-Jan-2019 11:10

Where the deposit came from DOES matter, even if you don't agree. Someone with more recent bank experience could chip in.

RunningMan

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#2160036 13-Jan-2019 11:10

Linux:@eracode Yes 110% cause I ticked investment property as I was going to rent it out for a while 12 months maybe

That's bound to have something to do with it - not just buying a house normally.

Check the LVR FAQ - it is probably something to do with the the proportion and type of loans that particular bank already has.

mudguard

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#2160038 13-Jan-2019 11:12

Is it an apartment?

Linux

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#2160040 13-Jan-2019 11:12

mudguard: Where the deposit came from DOES matter, even if you don't agree. Someone with more recent bank experience could chip in.

Where the deposit came from the bank knows and does not care it's well above board

It's RBNZ that has the issue in my case!

John

eracode

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#2160041 13-Jan-2019 11:14

@Linux There is nothing in the RBNZ regs that says banks can’t lend to home loan borrowers who have a 50% deposit - which is what you implied in your OP.

If you have some other non-standard borrowing requirement or structure that’s falling foul of some regulation, it’s impossible to comment further unless you are prepared to set it out clearly (which you have not yet done).

You shouldn’t come on here with a misleading half-story then make crazy claims about the RBNZ based on the half-story.

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

Linux

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#2160042 13-Jan-2019 11:14

mudguard: Is it an apartment?

@mudguard Nope free hold property on 852m2 (more or less) section

John

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RunningMan

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#2160044 13-Jan-2019 11:18

Linux:

Where the deposit came from the bank knows and does not care it's well above board

It's not usually whether or not it's above board - it's about the risk of the person defaulting on the loan. Someone who demonstrates an ability to save enough for a deposit over several years is showing through their actions that they know how to handle money and are therefore a lower risk to lend money to. A person that suddenly just obtains a chunk of money hasn't demonstrated this ability, so there is less info to base the risk assessment on - it doesn't mean there's anything wrong with being given money, just that is isn't as helpful as being able to prove that you can save well, so the bank will likely lend you less.

EDIT:Spelling

Linux

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#2160046 13-Jan-2019 11:18

eracode: You shouldn’t come on here with a misleading half-story then make crazy claims about the RBNZ.

@eracode What side of the bed did you get out of this morning?

The only reason why I know it's the RBNZ causing me this headache is cause the bank told me and a Lawyer and some silly new rules introduced I can't make this sh1t up!

I had zero idea RBNZ could even get involved before the bank called me and told me what had happened

John

mudguard

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#2160048 13-Jan-2019 11:19

Linux:
mudguard: Where the deposit came from DOES matter, even if you don't agree. Someone with more recent bank experience could chip in.

Where the deposit came from the bank knows and does not care it's well above board

It's RBNZ that has the issue in my case!

John

Again I'm not suggesting you're money laundering!

I'm saying that it may be a reason it's been declined. All yourself, before the gift how would my application look?
If it's an LVR they would say, but if you have 50% deposit it won't be anywhere near any kind of LVR restriction. Unless it was a micro apartment, some banks won't lend, small apartments, maybe 50% deposit, or land with no services, 50% etc. If it's none of those then it's something else.

Linux

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#2160049 13-Jan-2019 11:20

RunningMan:

Linux:

Where the deposit came from the bank knows and does not care it's well above board

It's not usually whether or not it's above board - it's about the risk of the person defaulting on the loan. Someone who demonstrates an ability to save enough for a deposit over several years is showing through their actions that they know how to handle money and are therefore a lower risk to lend money to. A person that suddenly just obtains a chuck of money hasn't demonstrated this ability, so there is less info to base the risk assessment on - it doesn't mean there's anything wrong with being given money, just that is isn't as helpful as being able to prove that you can save well, so the bank will likely lend you less.

@RunningMan The bank has zero issue giving me a loan even if I had 20% deposit and as already stated I do have my own money invested earning interest per month

John

alasta

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#2160052 13-Jan-2019 11:26

John, have you actually determined which specific RBNZ policy is affecting you here, or is that what your lawyer is trying to clarify?

In particular, is there an explicit RBNZ policy that prevents buying an investment property with a 50% deposit, or is having a 50% deposit incidentally putting you on the wrong side of some other RBNZ policy?

It's hard to provide advice without this information.

Linux

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#2160064 13-Jan-2019 11:29

alasta:

John, have you actually determined which specific RBNZ policy is affecting you here, or is that what your lawyer is trying to clarify?

In particular, is there an explicit RBNZ policy that prevents buying an investment property with a 50% deposit, or is having a 50% deposit incidentally putting you on the wrong side of some other RBNZ policy?

It's hard to provide advice without this information.

@alasta I am meeting my parents property Lawyer tomorrow and she is going to go over the issue which should be very interesting

John

surfisup1000

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#2160069 13-Jan-2019 11:32

I feel something is missing from the story too. Perhaps the OP is also unaware of the full facts.

I doubt the media tweets will get a response, as the scenario seems so implausible.

I did a quick scan of the RBNZ website and nothing shows a maximum deposit rule.

It just simply does not make sense to me, 2 willing parties wanting to do business and the government stepping in for no good reason.

Although, I've got an open mind. I've been convinced of the rights/wrongs of a scenario before, then something comes up that you hadn't considered which changes things.

RunningMan

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#2160071 13-Jan-2019 11:35

@Linux Either way, it's sounding complicated - buying a home is a stressful time - hope you get it sorted quickly and enjoy the place!

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