Stupid question, but I will ask: is it better to contact as many as possible banks to get mortgage?

[Pilar Jin]

Hi Everyone,

I am seeking to buy my an investment property to achieve positive cash flow, targeting $250k - 300k SFH. As a foreign investor, I can only get 50-60% down, 2/1 ARM 4% mortgage from the lender finances my first purchase.

Shall I contact other small banks to see if they will qualify me for a loan? Will they see me as 2nd home buyer or investment buyer? The difference on down payment and interest rate is huge. My first mortgage is 40% down and 5/1 ARM 3.99%. Will they find out through their credit system that I already have one loan before and disqualify me to the loan?

Thank you all for helping out.

Pilar

[Bill Gulley]

Pilar, saying a second home means you can't rent it! Not a SFD detached. There can be exceptions to condos professionally managed where you will have less than 6 months in rental services, but they will be hard to find. 

As to contacting other lenders, be careful but yes you can certainly shop around. What you don't want is a string of credit inquires that can appear to other lenders as having been turned down from them. One or two others is not a red flag, but 6 can be. 

Tell the lender you are shopping! They understand that, be up front, don't make it look like you're applying all over town and put them through processing for you to take a better deal, they won't want to get into games.

Select the lender you want, then tell them again you have been shopping and that you are not seeking any other loans, just with them!!!! This should be in a letter of explanation with your application. They may have to verify that with your other credit inquiries before closing.

Your residency status should be the first question, then go from there. 

You won't get a loan commitment without an application, expect to get loan program information and the basic qualification guidelines with current rates and fees, that's what you shop for. Good luck :)