Mortgage banker advises: Do one home loan at a time when possible

Purchase one: Three-family investment

Purchase price: $500,000

Loan amount: $300,000 conventional 15-year fixed

Purchase two: Second home condo

Purchase price: $179,900

Loan amount: $134,925 conventional 10-year fixed

Backstory: Harry Sessa was recently referred by a local Realtor to a client who was seeking to purchase two properties simultaneously. Both properties were in the New Haven area. One was a condominium to be used as a second home. The additional property was a three-family investment home.

While it does not represent a significant concern to purchasing, borrowing for multiple properties at the same time can create some potential concerns.

Keep in mind, for an investment property rents have to be reviewed for market price particularly when there may be leases expiring soon. Appraisals for multiple properties may require extra time especially for investment homes where rental income has to be considered.

For condos, there are condo surveys to be completed as well as condo documents to be reviewed. Also, a condo may be unwarrantable, meaning it does not meet Fannie Mae Guidelines and require more time for potential loan exceptions for approval.

In addition, both mortgages have to be cross-referenced against each other to ensure the client qualifies to carry both properties after the closing. In this particular scenario, since one was a second home and the other an investment property, each had to be processed with consideration of the carrying costs of the individual’s primary residence.

Fortunately, Sessa has a great deal of experience with clients wishing to buy multiple properties simultaneously and any pitfalls were well thought out and identified in advance for the underwriter.

Sometimes you may have a loan officer or processor who doesn’t have the level of experience to identify concerns in advance for multiple property purchases, especially with multiple property types.

When seeking to purchase more than one property, buying separately can make your loan processing and approval more simplified. Depending on your financial background and employment, the benefit of providing one set of documents simultaneously may also be a determining factor.

For this borrower, both loans both closed within one week of each other without a glitch and the client was very happy to have received good advice from the outset and great pricing packages for each new property.

Harry Sessa, Citizens Bank, NMLS 632510, 203-494-1478, harry.sessa@citizensbank.com,

www.harrysessa.com