Do Banks look at the downpayment or LTV on your other properties?

[David Zheng]

Hey All!

Just a quick question. When applying for a new loan, do mortgage lenders or banks look at the LTV or how much you forked over as a downpayment on your other rentals/primary or do they just care about Monthly payments and total Loan Amount?

Thanks!

[Chris Mason]

Hi @David Zheng,

In general we do not care about LTV of other properties. I've done deals where they put some other property underwater to come up with the down payment on the one we are buying.

For a long while departing residence rental income needed to be associated with 25% equity, but that has gone away at the Agency level. 

For folks committing occupancy fraud (which I'm sure you aren't, but there are lurkers reading this too) LTV of other recently purchased properties can be a give-away. For example if we're doing 5% down as an owner occupant, and underwriter sees that you just purchased two other properties putting 5% down, that starts to look like fraud.