How Many Mortgages Can You Have?

Written by Banks Editorial Team
6 min. read
Written by Banks Editorial Team
6 min. read

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Are you a real estate investor looking to expand your portfolio? Unless you want to pay cash for the next few properties you purchase, it’ll be necessary to borrow the funds. There’s a limit on the number of mortgages you can have, but it’s relatively generous if you’re just starting out. 

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Is It Possible to Have Multiple Mortgages?

Yes, it’s possible to have multiple mortgages. However, be mindful that once you have several, it can become more difficult to find lenders willing to do business with you. 

How Many Mortgages Can You Have at Most?

Fannie Mae permits up to 10 conventional home loans per borrower. However, most traditional lenders cap this figure at four to protect their interests. For the latter, you’ll generally need a good or excellent credit score, a loan-to-value (LTV) not exceeding 80 percent and a portfolio of existing investment properties that operate profitably. 

You may be able to secure additional funding through private lenders offering portfolio loans, hard money loans or blanket loans. 

How to Qualify for Up to Four Mortgages

Below are some general eligibility criteria you’ll need to meet to secure your first four mortgages: 

  • Credit score: Most lenders will check your FICO score, which ranges from 300 to 850. You’ll generally need a credit score that’s rated good, very good or exceptional – or between 670 and 850 – to qualify for your first four mortgages.
  • Down payment: Prepare to make a down payment of at least 20 percent on each loan you take out.
  • Loan-to-value (LTV) ratio: Your LTV ratio should not exceed 80 percent.
  • Payment history on current mortgages: If you have any mortgages, lenders will take the payment history on these in consideration.
  • Cash flow: The lender will want proof of cash flow from the rental properties you currently own (if applicable).
  • Documentation: You’ll need to provide recent tax returns or W-2s as proof of income, along with asset and liability statements and financial statements on other investment properties in your portfolio.

This list is not all-inclusive. Be sure to inquire with the lender you’re considering to determine if there are other guidelines they follow. 

How to Qualify for Over Four Mortgages 

If you’re looking to get more than four mortgages, here’s what lenders are looking for: 

  • Credit score: You’ll need a FICO score of at least 720.
  • Down payment: Most lenders require a 25 percent down payment for each investment property you acquire. It increases to 30 percent for duplexes, triplexes and quadruplexes.
  • Payment history on current mortgages: It’s vital that your payment history on the mortgages you currently have is squeaky clean.
  • Cash reserves: You should have at least six months of cash reserves handy for the properties you currently own and are looking to acquire. (To compute this amount, add up the current mortgage payment, including principal and interest, and don’t forget to add in the amount you pay for homeowners insurance and property taxes).
  • Documentation: The lender will most likely request that you provide tax returns from the two most recent years that reflect earnings from rental properties in your portfolio.

Consult with the lender to ask if there are any additional requirements you must adhere to before qualifying for more than four mortgages. 

Funding Options 

To get multiple mortgages, you’ll need to choose the right lender and loan program. Below are some popular options amongst real estate investors. 

Fannie Mae 5-10 Properties Program

If you’re looking to take advantage of this funding program that allows investors to finance between five and ten properties, here’s what you’ll need to qualify: 

  • Credit score: A minimum credit score of 720 is required.
  • Down payment: You’ll need a down payment of 25 percent for each single-family home you finance or 30 percent if you’re looking to buy multi-family or two- to four-unit properties.
  • Cash flow: It should be sufficient enough to cover the monthly mortgage payments, including the principal, interest, taxes and insurance, on all your properties.
  • Payment history on current mortgages: Lenders will want to see your payments on current mortgages up to date.
  • Credit history: Your credit history should be free of late mortgage payments in the past year, foreclosures and bankruptcies.
  • Documentation: The lender will likely request a completed Form 4506-T (Request for Transcript of Tax Return) and your two most recent tax returns that reflect rental income generated by your current properties.

Portfolio Loans

Many home loans are originated by one lender and sold off shortly after closing to another lender. This isn’t the case with portfolio loans, though, as they remain with the original lender for the life of the loan. As a result, they’re a more costly option than conventional loans, and some come with early repayment penalties. Still, they could be worth considering if you earn a hefty income and have a sizable amount of income to make a large down payment and maintain adequate reserves. 

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Hard Money Loans 

Available through individuals and private lenders, hard money loans are another alternative for real estate investors. Like traditional mortgages, these loan products use the property as collateral and falling behind on loan payments could result in foreclosure. Plus, they often come with steep interest rates and down payment requirements since they’re riskier. But there’s an upside – this loan product may be more accessible than a conventional mortgage if the lender’s guidelines are flexible. 

Blanket Loans 

These mortgage products are attractive to many real estate investors because they allow you to finance several properties using a single loan. So, you’ll enjoy a more streamlined funding process, and all the properties financed under the blanket loan will have the same terms. Blanket loans can only be used to buy properties in one state, though, since each state has its own set of guidelines. Furthermore, you can expect steep closing costs, and defaulting on the monthly mortgage payments puts you at risk of foreclosure since blanket loans are also secured and use the properties you finance as collateral. 

Pros of Having Multiple Mortgages

There are some key benefits of having multiple mortgages: 

  • You can expand your property portfolio without having to pay cash for the properties. 
  • You’ll build equity, which could pave the way for securing home equity loans and home equity lines of credit (HELOCs) to use for future purchases. 
  • You can significantly increase your cash flow much quicker than you would if you paid cash for each income-producing (or rental) property. 

Cons of Having Multiple Mortgages

Unfortunately, there are also drawbacks to consider: 

  • Your financial health and credit rating could take a hit if you’re unable to make the monthly mortgage payments. 
  • Your borrowing costs could be higher as having multiple mortgages may perceive you as a riskier borrower and charge you more in interest. (In some instances, a much higher down payment will also be required). 
  • You could lose your properties if you default on the monthly loan payments since they’re used as collateral to secure the mortgages. 

Things You Should Consider When Getting Multiple Mortgages

Do You Have a Steady Income Source?

Is your monthly income enough to cover more than one mortgage payment each month? Can you comfortably make the payments, or does it mean significantly cutting back other expenses just to get by? 

Ideally, you should have a steady stream of income that’s more than enough to cover housing costs before applying for additional mortgages. If not, it may be in your best interest to steer clear of applying for another mortgage until you’re more financially stable. 

Do You Have Other Assets?

As mentioned above, you’ll likely need to meet the lender’s cash reserve requirements to be eligible for multiple mortgages. The exact amount you’ll need varies, but aim for at least six months of PITI (principal, interest, taxes and insurance) to be a good candidate for funding. 

Have You Checked Your Credit?

A strong credit rating is also vital when you’re looking to get approved for multiple mortgages. That said, it’s pertinent that you check yours with the three credit bureaus – Experian, TransUnion and Equifax – to know where you stand. The lender will use the middle score when reviewing your application. So, if you have a 720, 760 and 705, the lender will go with 720 to make a lending decision. 

Can You Manage Multiple Mortgages?

It can be overwhelming to juggle monthly mortgage payments and other housing-related costs. So, it’s vital that you have a system in place to manage the home loans you currently have. If not, you’ll need to implement one before applying for an additional mortgage to get a better handle on the cash flow for your properties.

Should You Get Another Mortgage?

Although there are funding options available if you’re looking to take on another mortgage, you’ll have to assess your financial situation to decide if it makes financial sense. If your credit health is up to par and you have a cushion of reserves along with a sound investment strategy, moving forward with applying for another mortgage to increase the value of your portfolio and your earnings could be ideal. Otherwise, you may be better off holding out until your finances are in order and you have a strategy for the next set of income-producing properties you acquire. 

See If You Qualify for Another Mortgage

There’s no shortage of mortgage lenders to choose from, but you want an option that’s reputable and features a lending experience that’s both seamless and convenient. Spring EQ checks all these boxes, and you’ll receive support from an expert team to ensure you find the right funding solution for your financial situation. 

Its loan offerings include: 

  • Refinance loans: Convert up to x percent of your home equity into cash to purchase your next property and meet other important financial goals, like upgrading your home, paying for college or eliminating high-interest debt with a cash-out refinance.
  • Home equity loans: These products let you access up to 95 percent of your home equity – limited to $500,000 – without having to refinance. Loan terms are between five and 30 years, giving you the option to select a repayment period and monthly payment amount that works for your finances. So you can keep your current home loan.
  • Home equity lines of credit (HELOCs): You can also tap into up to 95 percent of your home equity through a HELOC. Plus, you’ll only pay interest on what you borrow and enjoy the luxury of interest-only payments for 10 years. Even better, you generally won’t need an in-home appraisal to get approved for a HELOC.

Best of all, Spring EQ has one of the fastest funding times in the industry. The average loan is funded in just 21 days, so you can move forward with purchasing your next property and using the other funds however you see fit. 

Navigate to the website today to learn more about Spring EQ’s portfolio of home lending solutions or to get pre-qualified for your next mortgage. You can get started with a simple form that only takes a few minutes of your time. 

Spring EQ Home Equity Loans
Fixed Rate Home Equity Loans, so Your Payments Won’t Change. Talk to a Specialist Today. Talk to a Dedicated Expert & Discover if a Spring EQ Home Equity Loan is Right For You. Fast Response. Money in days. Unlock Your Home's Value.

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