More money down on a deal?

9 Replies

Hey fellow pocketers, so I’m officially pre-approved by two lenders which I will most likely go with USAA since not only is the rate cheaper but it lowers my car insurance but that’s another story. I noticed both lenders want 25% and I’m confused as to why. Is it because I just bought a property 8 months ago? If so will I have a harder time for property 3? Will they expect more down?

It would be best to ask your lender versus the uninvolved BP community.

But, since you asked, 25% is a common requirement for banks' best rate for investor properties.  You may be able to get 20% if you pay a higher rate, maybe lower with an even higher rate.

Originally posted by @James Mc Ree :

It would be best to ask your lender versus the uninvolved BP community.

But, since you asked, 25% is a common requirement for banks' best rate for investor properties.  You may be able to get 20% if you pay a higher rate, maybe lower with an even higher rate.

This is true but my first property is also an investment and I put 20% down and a 4.8% loan the same mortgage company wants 25% down at 5.5 and all that has changed is the state I want to invest in and now I want a multi family.

investment property with fannie mae is 25% down, this is standard. Some banks do their own underwriting, but they will likely want even more down. The security of fannie is what allows for such a low (25%) amount of equity.

future investment properties will continue to fall in this 25% bracket

I think you can buy a higher rate and do 20% down for the first few, but with rates rising that won't be as lucrative anymore. I personally don't think it's a good strategy anyway.

Originally posted by @Eric Calabrese :

Hey fellow pocketers, so I’m officially pre-approved by two lenders which I will most likely go with USAA since not only is the rate cheaper but it lowers my car insurance but that’s another story. I noticed both lenders want 25% and I’m confused as to why. Is it because I just bought a property 8 months ago? If so will I have a harder time for property 3? Will they expect more down?

Fannie / Freedie underwriting guidelines are that 20% for SFH and 25% for MFH. If your investment is SFH and lender is stating you need 25% down, then maybe look for a different lender...?

Originally posted by @Chinmay J. :
Originally posted by @Eric Calabrese:

Hey fellow pocketers, so I’m officially pre-approved by two lenders which I will most likely go with USAA since not only is the rate cheaper but it lowers my car insurance but that’s another story. I noticed both lenders want 25% and I’m confused as to why. Is it because I just bought a property 8 months ago? If so will I have a harder time for property 3? Will they expect more down?

Fannie / Freedie underwriting guidelines are that 20% for SFH and 25% for MFH. If your investment is SFH and lender is stating you need 25% down, then maybe look for a different lender...?

It’s multi family but that makes sense, do you know if rates are typically a little higher on multi too?

Originally posted by @Eric Calabrese :
Originally posted by @Chinmay J.:
Originally posted by @Eric Calabrese:

Hey fellow pocketers, so I’m officially pre-approved by two lenders which I will most likely go with USAA since not only is the rate cheaper but it lowers my car insurance but that’s another story. I noticed both lenders want 25% and I’m confused as to why. Is it because I just bought a property 8 months ago? If so will I have a harder time for property 3? Will they expect more down?

Fannie / Freedie underwriting guidelines are that 20% for SFH and 25% for MFH. If your investment is SFH and lender is stating you need 25% down, then maybe look for a different lender...?

It’s multi family but that makes sense, do you know if rates are typically a little higher on multi too?

 I closed on a duplex in March @ 5.65. The rate was locked in Feb.  What is the rate that's being offered to you.. High... Low... is all relative. 

Originally posted by @Chinmay J. :
Originally posted by @Eric Calabrese:
Originally posted by @Chinmay J.:
Originally posted by @Eric Calabrese:

Hey fellow pocketers, so I’m officially pre-approved by two lenders which I will most likely go with USAA since not only is the rate cheaper but it lowers my car insurance but that’s another story. I noticed both lenders want 25% and I’m confused as to why. Is it because I just bought a property 8 months ago? If so will I have a harder time for property 3? Will they expect more down?

Fannie / Freedie underwriting guidelines are that 20% for SFH and 25% for MFH. If your investment is SFH and lender is stating you need 25% down, then maybe look for a different lender...?

It’s multi family but that makes sense, do you know if rates are typically a little higher on multi too?

 I closed on a duplex in March @ 5.65. The rate was locked in Feb.  What is the rate that's being offered to you.. High... Low... is all relative. 

Wow 5.65 is pretty high dude, but as long as the property profits it’s kind of irrelevant. Once I factor in the price of my car insurance going down using my lender my rate is really around 4.9 so I guess on a duplex that’s still really good

Originally posted by @Alexander Felice :

"I think you can buy a higher rate and do 20% down for the first few, but with rates rising that won't be as lucrative anymore. I personally don't think it's a good strategy anyway."

What would you recommend as a good strategy here?