Will Primary residence being under water impact ability to finance investment property

[Kathy Jackson]

I bought my primary residence in May of 2007, when the market was at it's height. Home values have dropped so much in my area that I cannot break even if I were to sell, so I intend to stay put for a couple of years, continue to pay on the mortgage and hope the market here recovers. Meanwhile, I want to purchase multi-family properties in another state and rent them out. I have family there and my sister-in-law will serve as the manager for my LLC until I can relocate. My credit is good, DTI is excellent, and I am working to ensure that I have 20% to put down, plus closing costs and funds for renovations. Will the fact that my current home is underwater factor in to a mortgage lender's decision on the purchase of investment property?

[Steve Vaughan]

Hi @Kathy Jackson. I don't see why the current value of your primary home should matter. As long as your DTI and payment history/credit score are good - you should be, too!

Commercial lenders (after you've obtained a loan) like to see your personal financial statement annually.  An underwater home will affect your net worth, but not loan qualilfying I wouldn't think.   Good luck with your plan!  It sounds good!