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When Gifted Equity Counts As Deposit · That Home Loan Hub

• 0:10
  SPEAKER_01: Hello, welcome back.
• 0:12
  SPEAKER_01: This is the episode for you because I'm so happy.
• 0:14
  SPEAKER_01: So because I just saved a deal.
• 0:17
  SPEAKER_01: I just saved a deal, Kunch.
• 0:18
  SPEAKER_01: Kyoda.
• 0:19
  SPEAKER_01: Hello.
• 0:20
  SPEAKER_01: How are you?
• 0:21
  SPEAKER_01: Good.
• 0:21
  SPEAKER_01: I just feel so proud of myself in this moment.
• 0:24
  SPEAKER_01: I cannot share the joy.
• 0:26
  SPEAKER_01: Tell us about it.
• 0:28
  SPEAKER_01: Alright, so deal.
• 0:29
  SPEAKER_01: We have this family where a person is buying a house of the parent.
• 0:35
  SPEAKER_01: So child buying a house of the parent.
• 0:37
  SPEAKER_01: Parent is gifting them equity in a house.
• 0:41
  SPEAKER_01: We've done that lots.
• 0:42
  SPEAKER_01: We've done this heaps.
• 0:44
  SPEAKER_01: Yeah.
• 0:44
  SPEAKER_01: Now the curveball here is I think either the banker that we were dealing with is not experienced enough or it's just a Christmas glitch.
• 0:52
  SPEAKER_01: I don't know.
• 0:54
  SPEAKER_01: But what happened was the banker pushed back saying that they cannot accept the full gift of an equity as they deposit.
• 1:04
  SPEAKER_01: That the client has to come up with at least 5% genuine savings for this deal.
• 1:10
  SPEAKER_01: They didn't have a Kiwi Saver?
• 1:11
  SPEAKER_01: They did not have a Kiwi Saver.
• 1:13
  SPEAKER_01: They don't have any savings because they don't live in this country, they live overseas.
• 1:17
  SPEAKER_01: So this is like a family home that is getting passed on from elderly parents to a child, and the child just needs a little mortgage to pay back the parents something.
• 1:27
  SPEAKER_01: So the interesting bit here is we've done hundreds of deals like this, and usually it flies.
• 1:33
  SPEAKER_01: But as I said, it must have been a glitch because when the banker pushed back, the first reaction was like, What really did we get something wrong here?
• 1:40
  SPEAKER_01: But I remember clearly the rules are, and this is something you cannot find in their guides.
• 1:48
  SPEAKER_01: So all those new advisors listen up, and all those clients that have been pushed back, listen up.
• 1:53
  SPEAKER_01: So the rules are if you don't have 20% deposit, if you don't have 20% deposit, that's when the bank requires you to have at least 5% genuine savings.
• 2:04
  SPEAKER_01: Yep.
• 2:04
  SPEAKER_01: This rule came into place.
• 2:06
  SPEAKER_01: I was at the bank at that time, so we're talking between 2012 and 2015.
• 2:11
  SPEAKER_01: I recall.
• 2:12
  SPEAKER_01: That's when I think it came out.
• 2:14
  SPEAKER_00: I think that's when triple CFA and all that came in.
• 2:17
  SPEAKER_01: Correct.
• 2:18
  SPEAKER_01: So RBNZ rule is you have to have at least 5% genuine savings if you do not have 20% deposit.
• 2:27
  SPEAKER_01: Now, in this client's case, they did have 20% deposit.
• 2:32
  SPEAKER_01: They did.
• 2:32
  SPEAKER_01: So what that meant is that rule does not apply to them.
• 2:36
  SPEAKER_01: Yep.
• 2:37
  SPEAKER_01: Correct.
• 2:38
  SPEAKER_01: To get away from that rule.
• 2:39
  SPEAKER_01: However, about three years ago, I did do a case, and there is an interesting curveball here.
• 2:47
  SPEAKER_01: If it's a Kayanga aura deal, then you can use all of that as gifted, even if you don't have 5% genuinely saved.
• 2:55
  SPEAKER_01: So the whole 5% can be gifted to you.
• 2:57
  SPEAKER_01: But if it's outside of Kayanga Aura deal, so if it's a high L VR, non-Kayanga Aura deal, then you do have to have 5% genuine savings.
• 3:06
  SPEAKER_01: So this is where things get a little bit muddy.
• 3:09
  SPEAKER_01: And this is where you have to clearly understand what the rules are.
• 3:13
  SPEAKER_01: So you can't push back on the banker because sometimes they get it wrong too.
• 3:18
  SPEAKER_01: They only humans, just like us.
• 3:20
  SPEAKER_01: And look, if I'm getting something wrong in this episode, please do let me know because I would love to hear your thoughts.
• 3:26
  SPEAKER_01: But the uh outcome of this was that we just won a deal and we just made it approved and pushed it across the line.
• 3:34
  SPEAKER_01: So there you go.
• 3:35
  SPEAKER_01: That's my big win.
• 3:36
  SPEAKER_01: Woo-hoo, well done.
• 3:38
  SPEAKER_01: You sound so excited for me.
• 3:41
  SPEAKER_01: Well done.
• 3:42
  SPEAKER_01: I think because you and I know this thing.
• 3:44
  SPEAKER_00: Yeah, I was just like, okay, well, that's normal.
• 3:46
  SPEAKER_00: And like, I guess it's also open to interpretation, right?
• 3:51
  SPEAKER_00: It's how bankers interpretate their policy and how advisors would interpret that.
• 3:56
  SPEAKER_00: And it's just open discussion, I think, with the bankers and the advisors to ensure that we're getting the right outcome for the client.
• 4:04
  SPEAKER_00: Yeah.
• 4:04
  SPEAKER_01: Because I think the other saving grace was that we've just done a deal literally that same week with the same bank, with the same scenario, and it went through no problems, no questions asked.
• 4:15
  SPEAKER_00: So it was really strange how this bank and like I said, we've done we've done a few of those scenarios with no issues.
• 4:22
  SPEAKER_01: No, but I just thought I'll remind people about this whole 5% genuine savings rule and in what situation it does apply and what situation it does not apply.
• 4:31
  SPEAKER_00: And just to recap, KiwiSaver is classified as genuine savings.
• 4:38
  SPEAKER_00: It is.
• 4:38
  SPEAKER_00: Yeah.
• 4:38
  SPEAKER_00: Yeah, KiwiSaver is genuine savings.
• 4:40
  SPEAKER_00: So those people who are like, oh, I don't have 5% in my bank account, it's okay.
• 4:44
  SPEAKER_01: It's okay.
• 4:45
  SPEAKER_01: We can make that work.
• 4:46
  SPEAKER_01: Yeah.
• 4:47
  SPEAKER_01: Awesome.
• 4:47
  SPEAKER_01: Well, thank you so much.
• 4:48
  SPEAKER_01: This was my highlight.
• 4:49
  SPEAKER_01: We're gonna keep it short and simple.
• 4:51
  SPEAKER_01: And cool, well done.
• 4:52
  SPEAKER_01: If I did get something wrong, guys, do let me know.
• 4:55
  SPEAKER_01: Or share your stories of your success, um, of how you managed to get your deals to work.
• 4:59
  SPEAKER_01: Thank you so much.
• 5:00
  SPEAKER_01: Thanks, bye.