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Original poster

Property Brothers/US mortgages

16 replies

Shelby10 · 18/08/2021 07:20

I’m in the UK and love watching Property Brothers. I’ve noticed though a few times that owners worry they won’t sell their current home when they find a new one in fear of having 2 mortgages. And usually the houses are about a million dollars. Is this something that happens? In UK we can only have 2 mortgages if we can prove we can pay them both comfortably, so very rarely an overlap of owning 2 houses. Also, the hosts sometimes give examples of how much extra the mortgage will be if they borrow maybe 50,000 more, and it usually seems so little compared to the UK. Just being nosey really and wanting to understand it more if anyone can answer my queries.
Thank you :-)

OP posts:
OneRingToRuleThemAll · 18/08/2021 07:25

I can't answer about the two mortgages thing but have you got a mortgage here since the rates were sub 2%?

I've just been approved for a £220k mortgage to buy a £300k house and I'm amazed that it's only £864 a month.

AGreatUsername · 18/08/2021 07:51

I can’t answer this but would also love to know! We usually watch this of an evening before the grown up telly starts and it seems crazy all these people worrying about having 2 huge mortgages!

Original poster
Shelby10 · 18/08/2021 08:11

Our mortgage isn’t a bad rate, but it just seems maybe the ones in the US are really good. And I always want to ask Drew about it all Grin

OP posts:
readytosell · 18/08/2021 09:26

It's come up a couple of times recently on here, and I think it's the fact that in the US Bridging loans are much more widely used. In the UK they are extortionately expensive and which is why lengthy chains can often form or people rent between sale and buying.

But ultimately you are still responsible for 2 mortgages so yeah it's a gamble your own won't sell for a while!

Original poster
Shelby10 · 18/08/2021 11:55

Thank you! I understand it more now Smile

OP posts:
EKGEMS · 18/08/2021 12:25

The property brothers show is shot in Vancouver, British Columbia in Canada

Hushpuppy1 · 18/08/2021 12:26

We took out a home equity loan on our house to use as the deposit on our new house. For one month we had 2 mortgages and the home equity loan! This was in 2006 but it’s still an option now, I believe.

Bythemillpond · 18/08/2021 12:33

All I can say is what ever system the US used is far better than ours.
Buyers bid on our house in March and we are still not exchanged. Waiting for buyers buyer now.

This system is a joke.

afromom · 18/08/2021 12:35

I'm not sure that mortgages in the US are in fact cheaper than UK ones. My DB who lives in LA was really shocked at how much cheaper ours is (1.59%) compared to theirs. I don't remember the exact interest rate he said but it was around double ours. Pretty much all are more than 2%, with longer term ones closer to 3%. They also don't switch as often as we do. They tend to borrow at the same rate across the length of mortgage taken out, rather than have 2/5/10 year terms on a 25 year mortgage.

Bythemillpond · 18/08/2021 14:01

I always thought mortgages weren’t a couple of percent more than here

purplesequins · 18/08/2021 14:06

well, I live in foreign (eu) and here you always buy chain free. there is alwas some time, usually a month or so where you own two homes. time to decorate the new place whilst making sure the old one is left clean and freshly painted.

you take a bridging loan to cover that.

eca80 · 18/08/2021 18:09

Either you plan for it or can get a bridge loan. If you anticipate problems selling your house, you might choose to sell first to eliminate the risk.

The process of buying and selling in the US is super quick compared to the uk. The whole process seems quicker because you have to commit sooner, so unlikely to drag on for months and months like here. Chains aren’t super common in the us, and would rarely be more than a couple of transactions (at least based on what I have seen with
Friends and family). Far more common to go into temporary accommodation at some point in the process because few Americans would have the patience.

Original poster
Shelby10 · 18/08/2021 21:16

@EKGEMS

The property brothers show is shot in Vancouver, British Columbia in Canada
They have a few shows don’t they? Seen quite a few in Las Vegas
OP posts:
Spaceman1 · 19/08/2021 07:27

In the US you can take out a 30 year more mortgage at a fixed interest rate for the whole term and you can often transfer your mortgage when you move without a penalty. Whereas in the UK you can fix for 2-5 years and you can't easily take your mortgage with you.

Azilliondegrees · 19/08/2021 07:34

I think because the process is legally binding much earlier than it is in the U.K. people tend to find their onward property before selling their current one. They don’t rely on large chains in the same way because there isn’t the need to buy and sell on the same day. But that means individuals take on differing amounts of risk. The whole process is quicker so most people only own two properties for a small number of weeks in reality but it’s probably the most stressful part of their process, that until you’re in escrow on both properties you might have a period with two mortgages. I have no idea how their deposit works in this though (because that’s what really necessitates buying and selling simultaneously here, to release the deposit). I guess they must have a bridging loan to match the equity.

Bythemillpond · 19/08/2021 09:41

Azilliondegrees

I think because the process is legally binding much earlier than it is in the U.K. people tend to find their onward property before selling their current one

We haven’t found an onward property because the mortgage company our buyers went with changed their minds about giving them a mortgage because of one detail that although they were told about and it really didn’t make any difference in the grand scheme of things the mortgage company then decided they had to have several more documents of proof which took several weeks to get.

Then my buyers after getting all the proof they needed found that all the other documents had run out and had to start again getting updated versions of the original documents

We are still not exchanged and we agreed a price in February.
We bought a flat with a mortgage before and that again took so long for the mortgage company to get their act together that we had to start again and get all the documents updated.
My first property took 8 weeks from seeing it and moving in. Now it is nearer 8 months.

We have been looking around at properties but can’t proceed because of the uncertainty.

We think it has cost us approximately £50,000.
I just can’t face going through this again otherwise I would take the house off the market and try to sell it next year but I know the likelihood will be that we will just have to live through this all again

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