Rental Property Financing. Should I bring Comps to the lender?

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Rental Property Financing. Should I bring Comps to the lender?

Vincent Pelletier
Investor · Salmon Arm, British Columbia · Member since 2017 · 19 posts · 2 votes
Hello BP When looking for a conventional mortgage from a local bank, would you bring Comps with you? I am still working to purchase my first investment and when talking with the lender it seems like it could reduce the amount of work that they have to do and possibly portray a higher level of character and organization on my part. Thanks for any advice Vince
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Stephanie MedellinBusiness Member
Mortgage Broker · CA · Member since 2014 · 1k+ posts · 642 votes
7y

@Vincent Pelletier  I suppose it couldn't hurt, but it's really not necessary.  Lenders and loan officers can easily pull comps to get an idea of property value.  Does your property have unique features not typical in your market or is it recently renovated?  If so, you should mention those things.

The lender doesn't determine the value, the appraiser will ultimately give their opinion of value.

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  • Stephanie MedellinBusiness Member
    Mortgage Broker · CA · Member since 2014 · 1k+ posts · 642 votes
    7y

    @Vincent Pelletier  I suppose it couldn't hurt, but it's really not necessary.  Lenders and loan officers can easily pull comps to get an idea of property value.  Does your property have unique features not typical in your market or is it recently renovated?  If so, you should mention those things.

    The lender doesn't determine the value, the appraiser will ultimately give their opinion of value.

    [email protected]
    Stephanie Medellin, Loan Factory58 Reviews
    WebsiteView Page
    2Reply
  • Edison Reis
    Rental Property Investor · Kelowna, British Columbia · Member since 2015 · 136 posts · 54 votes
    7y

    My experience in Canada is that comps are nice to have (for your own due diligence) but the chartered banks won’t care too much as they will ask for a formal appraisal with one of their own appraisers.

    They are the ones holding the cash so is normal to do so

    Cheers

    Edison

    1Reply
  • Theo Hicks
    Rental Property Investor · Tampa, FL · Member since 2015 · 1k+ posts · 969 votes
    7y

    Hi Vincent,

    I've had a friend provide comps to the appraiser, because the comps they used didn't make much sense, and he was able to get a slightly higher appraised value. Of course, your comps need to make sense and there is no guarantee that they will use them.

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  • Dennis Dahlberg
    Phoenix, AZ · Member since 2017 · 93 posts · 105 votes
    7y

    Don't waist our time doing this.. they will do an appraisal.  

    What they are really going to need to see as 

    • lease agreements, 
    • your bank statements show the income and
    • your credit.

    Loan amount is going to be based on total rental income.

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  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    7y
    Originally posted by @Vincent Pelletier:
    Hello BP When looking for a conventional mortgage from a local bank, would you bring Comps with you? I am still working to purchase my first investment and when talking with the lender it seems like it could reduce the amount of work that they have to do and possibly portray a higher level of character and organization on my part. Thanks for any advice Vince

     Not crazy to do.

    What I do when a borrower shows me comps: offer tips if necessary, and tell them to present it to the appraiser when he shows up. The appraiser is really the person who would/could use this info.

    I recently did a refinance, and the value came in to the dollar down to what I anticipated. 

    1Reply
  • Jason D. Lewis
    Lender · Vancouver, BC · Member since 2017 · 40 posts · 16 votes
    7y

    @Vincent Pelletier

    You should connect with a strong investor friendly mortgage broker.  All big banks have different lending criteria's, so they wont submit your deal where it doesn't belong.  Second, they can utilize a "friendly" appraiser who will help with the lending value.  

    If you work with a smart broker, they will guide you through the whole process.  There are so many small details that can impact your deal that you want independent eyes reviewing the details, prior to the bank vetting anything.

    Just like RE agents, you should look to work with a Mortgage broker who is also an active investor.

    Jason Lewis

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