Financing in Los Angeles>Question Details

klouie_lim, Home Owner in San Jose, CA

Unacceptable Property: Guesthouse to Main house ratio

Asked by klouie_lim, San Jose, CA Fri May 10, 2013

We got denied on our refinance, due to Unacceptable Property, according to the underwriter, the guesthouse is more than 30% the size of the main house. It should be lower than 30% for them to approve us. I tried researching their reason and found nothing in the internet. Is there such rule in mortgage? This is the first time I heard of that. We already paid for the appraisal and we cannot get it back.

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Banks and Lenders make their own rules
1 vote Thank Flag Link Mon May 13, 2013
Did you get that in writing? It does sound a bit sketchy... what is the loan amount and equity position?
0 votes Thank Flag Link Fri Dec 26, 2014
I am rarely stumped but that one is a new one. My first instinct is to tell you that it's nonsense, but since I have never heard of it, I should probably check.

What I can tell you is that I have done plenty of refinances in CA with guest houses that frankly, I'd love to be a guest in. I've never had an underwriter question the size ratio. Are there other comps with guest houses? How is it zoned? Are you sure that's why you were denied? You are due a notice of action taken which would state the reason for the denial. Is that what it says?
Web Reference: http://WeFixRates.Com
0 votes Thank Flag Link Sat May 11, 2013
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