captainsensible

Hi,

Can a mortgage company refuse a mortgage based upon me owning a house in the UK where I have 75%LTV.

The mortgage company are saying I need 30% equity in the house. How is it even in their jurisdiction to say that?

For reference, it is rented out and the tenants are paying 200GBP more than what the mortgage payment is. The US mortgage company are also saying it needs to have been leased longer (my tenants have been in for 2 months on a 12 month lease agreement)

Any opinions appreciated!

markwm

Their money, their rules.

Try another company if you don't like the conditions.

As a mtter of interest, are you buying as a resident or for holiday purposes? Perhaps that is having an impact.

captainsensible

I am buying (or attempting to!) as a resident. I live and work here already.

Uncle_Bob

I owned in the UK and purchased in America with 5% down, just had to pay PMI for a while.
Then sold house in the UK and refinanced with 20% down.
Mind you this was over 10 years ago and their rules have changed a bit since then.

Bink

Yeah, I'm afraid they get to quote the conditions as it's their choice to lend to you or not.

Try another company - I got mine through a small firm linked to the builder I bought my house from but I had a UK property that was rented out too and it didn't cause any issues. Don't think they asked me for its current value but did want a record of the tenancy and the mortgage (my tenants had been in there for more than a year though).

Good luck!

captainsensible

Thanks. Unfortunately we are really up against it, time wise - our commitment is due Friday but realistically that is Wednesday due to Thanksgiving. Getting an extension on closing obviously depends on the seller.

The most annoying thing is they have messed us about for the last 2 weeks, asking for this and that, before bringing this up today - our loan officer hasn't been much help either, offering helpful suggestions like 'can you pay your mortgage off in the UK' - err, no, why do you think I am renting it out!

Bink

What basis are they assessing you on? Normally it's on monthly affordability of bills against income. Typically it's around 30% I believe (off the top of my head it's 28% - 36% depending on lender, circumstance etc).

I was also assessed on the short term ability to pay my UK mortgage should I need to but that was no issue to me as I was borrowing well within my capability.

Is there any chance of them reassessing your UK house value?

captainsensible

I gave them my house value based upon what it was appraised at in January 2012 when I re-mortgaged. Arguably it could have risen in price but equally it could have dropped in price - how would a US mortgage company be able to re-assess it?

At this point a flat out no would be preferable to being messed around.

Bob

They can ask for whatever they want and have what ever stipulations they want.

They have the money and you want it. If you don't, you can always go else where...

captainsensible

I understand that, I was questioning more their jurisdiction over my UK mortgage and whether that was normal. Other answers would indicate its not unheard of.

Personally, on the one hand I think its ok, but then on the other, when they start asking questions about how much of my mortgage payment goes into escrow for property taxes it indicates a fundamental lack of understanding of the UK process that they should not be getting bogged down with providing I can prove the basics they require.

Edit: But of course, I appreciate that they can make up whatever rules they want!

Bink

It sounds like they're trying to fit it into a box. I had a conversation directly with the underwriter who was writing my loan which clarified the situation. Your UK mortgage, won't fit neatly into a standardized form on an automated system. Speak to your loan officer and see if the underwriter is in the equation or if it's just being handled by a worker at the bank.

In my case, the only reason that the UK mortgage was brought up was as a means to show I had previous history of having and paying a mortgage.

captainsensible

Can a US lender pull a UK credit report???

Bink

Mine said they could but then asked me to do it for them (something about it costing them money or somesuch!) so I don't have a definitive answer on that I'm afraid...

I actually suspect not to be honest.

Bob

Not without your permission and a lot of hassle and often has little meaning over here anyway.

captainsensible

Ok, thanks. Didn't think so. My loan officer is trying to tell me they can.