Multiple mortgages: How many can you really have?
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Affordability: Can you afford multiple mortgages?
For most people, the major hurdle to getting multiple mortgages is simple: can they afford the repayments on each of the mortgages? As an example, the major criteria for affordability for buy-to-let mortgages is the potential rental income.
With residential mortgages, on the other hand, lenders usually want to construct a much more detailed picture of your financial stability, which involves your outgoings and your household income. The range of outgoings is as broad as your existing mortgage repayments and your Disney+ account. Your credit rating will be thoroughly reviewed to give your lender proof of your ability to repay any money you borrow, which is the case for any mortgage.
Different requirements for availing of multiple mortgages
There are different requirements for availing of multiple mortgages, and your lender will likely ask you to fulfill certain requirements when you want to qualify for financing on your first four mortgages, such as:
Requirements for 1-4 mortgages.
- A loan-to-value, or LTV, ratio upwards of 80%
- A credit score of approximately 670-739, which would rate as good to excellent
- Proof of income from tax returns or W-2s
- Cashflow availability from your rental properties
- Proof of existing conventional mortgages
- Statement of liabilities and assets
- Financial statements on any existing investment properties
Requirements for availing of five to 10 mortgages, on the other hand, tend to differ, with lenders imposing more strict qualifications. Typically, when you want more than four mortgages, underwriting guidelines tighten dramatically. Some requirements for availing of five to 10 mortgages include:
- 30% down on quads, triplexes, and duplexes
- No late mortgage payments on any property
- 25% down payment on each investment property
- Minimum credit score of 720
- Six months worth of money reserves for principal, interest, taxes, and insurance coverage on all properties
- Two years of tax returns showing all rental income from all properties.
Other ways to finance multiple mortgages
Aside from tapping into conventional loans, there are other ways that you can finance multiple mortgages, including the following:
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