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

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

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

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

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!

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.

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

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.

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. 

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.

Linux:

 

My parents were born in Wellington and Levin 

 

 

 

John

 

There's you problem!

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

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!

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.