Financing a fifth mortgage

[David Long]

im new to bp and would like some advice on options to buy a house.

I have five properties in the Dayton/cincy area and all properties are rentals.  I recently obtained a personal 5yr loan @3% and decided to pay off one of the properties.  I still have four active mortgages.

I will be away for military training for about 6 months and then move back to the Dayton area. I am looking to buy another property as my primary residence. I'm considering either a second VA loan or a conventional loan.

I've spoke with the banks before and they have told me I need 6 months piti for any properties I had.  I believe it's only 3 months for a va loan unless it's multifamily (I have one duplex).  Will a bank count my paid off property as an asset for this?

Do you think I will have to have more than 5% down payment if I could do a conventional loan?  I bought a primary residence earlier this year and shortly after moved out of state for a job (currently renting).  Do you think a bank will hold this against me?  Should I only talk with portfolio lenders?  I plan on inquiring with some banks when it's getting closer to the time for me to move back to the Dayton area.  Any advice would be greatly appreciated.

David

[Kerry Baird]

You have the advice (above) from the lender side, and here is from the borrower side.  

We recently bought a rental with a fifth mortgage and there were a lot of hoops to jump through, in terms of paperwork and tracing the pathway of funds, plus information on our current rentals. The lender asked for a number of "Memo of Explanation" requests to explain why we had such-and-such occur in our financial situation.  We have been renting our current batch of properties since 2012, so have a track record that allows the bank to count the rental income, as you seem to.  

The bank did want to see a large amount of reserves, but they allowed us to use retirement funds to fulfill the requirement.  The down payment we could have opted to get a second mortgage, according to the agent, but we opted for 25% down as we are happy for extra cash flow.  Immediately, the agent who originated the loan sold it off to Flagstar.  

It can be done in this present market.