How to solve issue of lease termination during mortgage (Irving: apartment, leasing)

[BigDGeek]

I bought a house while I was still a tenant and was nearing the end of my lease. I had already notified the landlord that I wasn't going to renew. When all was said and done I had a one-month overlap, so for one month I paid both rent and a mortgage. Wasn't anything I could do about it and I never tried to squirm out of the lease. Wasn't worth my time.

However, my lender never asked me about my lease. Like...ever.

I think TC80's on to something here.

[greenusa17]

Thanks a million to all!...just fyi- I have reserve equals to 40% value of the house.I got interest rate of 3.7% for 30 year fixed. I hope lender is not trying to discourage me because I got much lower rate than current rate.Everything is fine except this lease issue. Lender said that they put my current rent $2000 per month to calculate my expense per month for 30 years not only for next 5 months lease period. So my ratio goes above 50 which is greater than 45 so they can not approve the loan. our credit scores are above 800. 0 late payment. clean credit history.

[Stevehanrahan41]

Originally Posted by greenusa17

Thanks a million to all!...just fyi- I have reserve equals to 40% value of the house.I got interest rate of 3.7% for 30 year fixed. I hope lender is not trying to discourage me because I got much lower rate than current rate.Everything is fine except this lease issue. Lender said that they put my current rent $2000 per month to calculate my expense per month for 30 years not only for next 5 months lease period. So my ratio goes above 50 which is greater than 45 so they can not approve the loan. our credit scores are above 800. 0 late payment. clean credit history.

Dude seriously. If this is the honest to gods truth, please go find another lender. Lol. With an 800 credit score lenders will be falling over themselves to lend you money if everything else is line.

[VegasMan_72]

Originally Posted by Stevehanrahan41

Dude seriously. If this is the honest to gods truth, please go find another lender. Lol. With an 800 credit score lenders will be falling over themselves to lend you money if everything else is line.

No they wouldn't. Not with his ratio being over 50

[greenusa17]

what I believe is that their approach is wrong. They should ignore my lease because its there for only next 5 months. Other lenders told me now that they always ignore lease completely. I can not go to another lender now because the closing date is 1/5/17.

[frisco19542]

Originally Posted by greenusa17

Thanks a million to all!...just fyi- I have reserve equals to 40% value of the house.I got interest rate of 3.7% for 30 year fixed. I hope lender is not trying to discourage me because I got much lower rate than current rate.Everything is fine except this lease issue. Lender said that they put my current rent $2000 per month to calculate my expense per month for 30 years not only for next 5 months lease period. So my ratio goes above 50 which is greater than 45 so they can not approve the loan. our credit scores are above 800. 0 late payment. clean credit history.

If you have 40% reserve breaking a lease should be no problem.

I see one of two things here either the story is not true and there is more to the story or the lender wants you to jump through hoops to prove that want the loan. 5 months left on a lease is not a big deal and they should not be including it. Go to your landlord and work something out. People break leases all the time it is not a big deal to a landlord.

Also I would start talking to other lenders quickly. You can always get an extension on a house if you a need a week to two to close. Some lenders are just a pain to deal with. I had a lender once claim that rental income didn't count and I had to add the loans on them as expenses. I even had a fully paid off house but that considered an expense because of taxes and insurance and I could not count rental income on it. My solution was to go to another lender who closed within 10 days.I ended up paying 1/4 point higher and paying for anew appraisal but I was able to close no problem. A few years later that fist lender was sued for not locking in rates as promised. Ended up getting a few hundred dollars in a class action suit. Some lenders (ones who advertise extra cheap rates) do not lock in rates like they say and then do not close when rates go up. Perhaps that what is going on here.

[pharpe]

I don't understand why the landlord would not accept payment in full for your remaining lease. That just doesn't make any sense. Why would you pass up money in hand in favor of taking in installments?

[Stevehanrahan41]

Originally Posted by VegasMan_72

No they wouldn't. Not with his ratio being over 50

That's why I said if everything else was the truth.

[greenusa17]

Earlier Lender said they are following federal guidelines. Now when I asked for copy of that specific guideline, they said "There is nothing in the federal guidelines stating your lease has to be paid in full or cancelled HOWEVER if it is not, we have to add the monthly rent amount to your debt to income ratio and when we do you do not qualify for the loan. Your debt to income ratio is higher than allowed. As John and I have been telling you for almost 2 weeks now, we need proof that the lease was paid in full OR a fully executed agreement from you and your landlord stating you are breaking the lease."

Latest reply from Landlors after lot of efforts " You will be charged a reletting fee which is 85% of 1 month’s rent if you fail to give 60day written notice. The reletting charge is not a cancellation fee and does not release you from his obligations under this lease per paragraph 10.1 The reletting charge doesn’t release you from continued liability for future or past-due rent; charges for cleaning, repairing, repainting, or dealing with unreturned keys; or other sums due."

Again the pending issue is the Lender wants proof letter saying I am out of lease completely.

[frisco19542]

Originally Posted by greenusa17

= " You will be charged a reletting fee which is 85% of 1 month’s rent if you fail to give 60day written notice. The reletting charge is not a cancellation fee and does not release you from his obligations under this lease per paragraph 10.1 The reletting charge doesn’t release you from continued liability for future or past-due rent; charges for cleaning, repairing, repainting, or dealing with unreturned keys; or other sums due."

What they are saying is they need 60days notice and the reletting charge means they will still charge to damage security deposits and anything and any rent due. There not going to give the right to collect rent if you do not move out or pay rent.


The reletting charge is what releases you from the lease. There is virtually no chance they will go after you for anything more. The reletting fee is your contract to release you from the lease. Give the 60 days notice have them sign receipt and give it to your Lender. Tell them you are paying the reletting fee above and move on.

You should have given written notice the day the offer was accepted on the house to stop the clock. This might be the issue with your lender because you have not yet. Perhaps you are not planning on moving out?