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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#2160072 13-Jan-2019 11:35

surfisup1000:

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.

@surfisup1000 I hope you are correct and it seems so implausible to me and my family / friends as well

John

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#2160073 13-Jan-2019 11:37

Linux:

@RunningMan The bank has zero issue giving me a loan even if I had 20% deposit ...

It's because many banks had 'zero issue' giving investors loans that the RBNZ introduced the LVR in the first place.

Some investors may use 'defacto loans' to lift their deposit up to the required minimum. The problem with 'gifted money' is that it is impossible to know whether these gifts are genuine or merely informal loans dressed up as 'gifts' to get around the LVR restrictions.

There will be a reason why the bank was unable to proceed with the loan (other than the deposit was too big), it would be helpful if you could update the thread when known?

Linux

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#2160077 13-Jan-2019 11:39

dafman:

Linux:

@RunningMan The bank has zero issue giving me a loan even if I had 20% deposit ...

It's because many banks had 'zero issue' giving investors loans that the RBNZ introduced the LVR in the first place.

Some investors may use 'defacto loans' to lift their deposit up to the required minimum. The problem with 'gifted money' is that it is impossible to know whether these gifts are genuine or merely informal loans dressed up as 'gifts' to get around the LVR restrictions.

There will be a reason why the bank was unable to proceed with the loan (other than the deposit was too big), it would be helpful if you could post this?

Gifting certificate signed correct and as advised it's the RBNZ that has the issue not the bank

John

Linux

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#2160080 13-Jan-2019 11:50

RunningMan:

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

@RunningMan Thanks I am sure tomorrow everything will be cleared up and I can update this thread with the actual RBNZ rule that is trying to screw me over

John

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#2160085 13-Jan-2019 12:05

RBNZ LVR Factsheet for Borrowers, Dec 2018:

https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Financial%20stability/LVR/lvr-restrictions-guide-for-borrowers.pdf?la=en

The new regs that came into effect on 1 Jan make it easier to get a home loan, not harder:

https://www.newshub.co.nz/home/money/2018/12/lvr-restrictions-eased-for-both-low-deposit-buyers-and-investors.html

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Geektastic

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#2160099 13-Jan-2019 12:22

Linux:
Geektastic: I can point you to an excelled broker of you need help solving the problem without paying lawyers.

I'm not paying the lawyer

No doubt someone is...😉

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Linux

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#2160101 13-Jan-2019 12:28

Geektastic:
Linux:

Geektastic: I can point you to an excelled broker of you need help solving the problem without paying lawyers.

I'm not paying the lawyer

No doubt someone is...😉

Yes you are correct someone is (Got to love the parents)

John

Geektastic

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#2160102 13-Jan-2019 12:29

I can't imagine why the bank would care one iota how big a deposit you have.
You might sell a house for $700,000 clear then buy one for $800,000 and only need $100,000 loan. I can't see why any bank would object to such terms.

Linux

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#2160104 13-Jan-2019 12:31

eracode:

RBNZ LVR Factsheet for Borrowers, Dec 2018:

https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Financial%20stability/LVR/lvr-restrictions-guide-for-borrowers.pdf?la=en

The new regs that came into effect on 1 Jan make it easier to get a home loan, not harder:

https://www.newshub.co.nz/home/money/2018/12/lvr-restrictions-eased-for-both-low-deposit-buyers-and-investors.html

@eracode I wish the new regs made it easier but they have made it far more difficult for me!

The issue is everyone is saying it's your bank causing the issue and I know it's not the bank but RBNZ

John

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#2160105 13-Jan-2019 12:32

Geektastic: I can't imagine why the bank would care one iota how big a deposit you have.
You might sell a house for $700,000 clear then buy one for $800,000 and only need $100,000 loan. I can't see why any bank would object to such terms.

That is different and not my situation as a gift of money was done to me

John

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#2160107 13-Jan-2019 12:33

Geektastic: I can't imagine why the bank would care one iota how big a deposit you have.
You might sell a house for $700,000 clear then buy one for $800,000 and only need $100,000 loan. I can't see why any bank would object to such terms.

They don’t object - they love low LVR customers - the more of those that they have, the more high LVR lending they can do. This is what the new regs are all about.

There’s more to this story than we are aware of, yet

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Jase2985

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#2160111 13-Jan-2019 12:35

Linux:

eracode:

RBNZ LVR Factsheet for Borrowers, Dec 2018:

https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Financial%20stability/LVR/lvr-restrictions-guide-for-borrowers.pdf?la=en

The new regs that came into effect on 1 Jan make it easier to get a home loan, not harder:

https://www.newshub.co.nz/home/money/2018/12/lvr-restrictions-eased-for-both-low-deposit-buyers-and-investors.html

@eracode I wish the new regs made it easier but they have made it far more difficult for me!

The issue is everyone is saying it's your bank causing the issue and I know it's not the bank but RBNZ

John

where in that has it made it harder?

i think your issue lies elsewhere sadly

Linux

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#2160113 13-Jan-2019 12:39

Jase2985:

Linux:

eracode:

RBNZ LVR Factsheet for Borrowers, Dec 2018:

https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Financial%20stability/LVR/lvr-restrictions-guide-for-borrowers.pdf?la=en

The new regs that came into effect on 1 Jan make it easier to get a home loan, not harder:

https://www.newshub.co.nz/home/money/2018/12/lvr-restrictions-eased-for-both-low-deposit-buyers-and-investors.html

@eracode I wish the new regs made it easier but they have made it far more difficult for me!

The issue is everyone is saying it's your bank causing the issue and I know it's not the bank but RBNZ

John

where in that has it made it harder?

i think your issue lies elsewhere sadly

So the bank and property lawyer are incorrect? I would love them to be incorrect and save me this headache

John

Oldmanakbar

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#2160116 13-Jan-2019 12:42

I reckon its might be the new anti-money laundering/finance of terrorism laws that came into effect that mean they are now legally obliged to see where the money came from.

I know the banks had to implement a system for it, same as the law firm I work for. The rules for that are fairly draconian. If that is the case its not the RBNZ though, its the AML team at the bank.

That or they somehow classify your parents as foreign investors? (Crazy, but you never know).

Linux

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#2160117 13-Jan-2019 12:43

Oldmanakbar:

I reckon its might be the new anti-money laundering/finance of terrorism laws that came into effect that mean they are now legally obliged to see where the money came from.

I know the banks had to implement a system for it, same as the law firm I work for. The rules for that are fairly draconian. If that is the case its not the RBNZ though, its the AML team at the bank.

That or they somehow classify your parents as foreign investors? (Crazy, but you never know).

@Oldmanakbar My parents were born in Wellington and Levin in the 1940's not Shanghai

Their parents were also born in New Zealand (My grandparents)

John

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