Bank says i have too many mortgages

23 Replies

I was writing to ask your advice. I sold one home this year and i am trying to releive some of that tax burden by buying a 4 plex with less than 90 days to go. I am being told i have too many mortgages, 12. I have a great FICO score and plenty of reserves. Where can i go to get a mortgage. Any ideas would be great. I can't be the only one with this kind of problem. I was thinking i should find a FISBO or go commercial. What would you do.

I actually have 3 mortgages now and I am looking for my 4th house hack. My business partner and mentor explained this challenge to me that she is stuck because of the number of mortgages she has and the bank does not want to give her another mortgage. I can not believe that has to be a no. That is why I posted the forum question. Our ultimate plan would be to combine both of our business. So my mentors problem is also my problem. I was hoping someone could advise me of another lender that did not care as long as you can afford it. I will correct my profile.

Thank You

Banks typically stop giving out mortgages after around 4. Private money lenders look at your portfolio instead of the amount of loans you have to see how well you are doing. Lima One Capital is a national lending company I know of that works very well with real estate investors. Reach out to private money lenders and get their opinion. Good luck to ya

@ROBERT Richards thanks for clarifying. You should be able to get a fourth conventional mortgage, but no one in this thread can say for certain without knowing far more than you would be wise to divulge on a public message board.

You might call the mortgage broker in Chandler that we work with a lot. No financial benefit to me, but if you call, please let them know I referred you. They've been very good to us and I'm happy to refer them. RedStone Mortgage on Price Road. Ask for Matt. They do conventional lending all the way to 10 mortgages, so #4 wouldn't seem to pose a problem, but there are no guarantees in life....

Good luck!

Originally posted by @ROBERT Richards :

I actually have 3 mortgages now and I am looking for my 4th house hack. My business partner and mentor explained this challenge to me that she is stuck because of the number of mortgages she has and the bank does not want to give her another mortgage. I can not believe that has to be a no. That is why I posted the forum question. Our ultimate plan would be to combine both of our business. So my mentors problem is also my problem. I was hoping someone could advise me of another lender that did not care as long as you can afford it. I will correct my profile.

Thank You

FYI, they are counting number of financed properties, not number of mortgages. If you have a first and a HELOC on one property, that's two mortgages but one financed property.

How many financed properties are we at? 

I don't think I understand.  You have 3 and your "business partner" has 9.  Combining your business has nothing to do with it.  You will still have 3 in your name and your partner will have 9...

You can have up to 10 in your own name.  As long as your business partner isn't on the mortgage, then they don't count..

What am I missing?

Do not "combine" your properties, you will then inherit his problem. An individual is capped at 10 mortgaged Properties, for Fannie Mae loans. After that you can get commercial loans, without having to be an LLC.

You can't just "combine" your properties.  The mortgage was taken out in either your name or your business partner.  The only way to combine them (so they count for both of your) would be to refinance them in both of your names, which would be a terrible decision to do (most likely).

I have over 50 mortgages and still getting loans. Call your local banks to get these deal financed. Call and ask for the commercial mortgage VP. Then talk with them about getting a commercial loan on your 4 plex properties. Terms will likely be 20-25 year amortization, 5-10 year fixed at 4.5-5.5%. Don't give up after only a few banks

Originally posted by @Todd Dexheimer :

I have over 50 mortgages and still getting loans. Call your local banks to get these deal financed. Call and ask for the commercial mortgage VP. Then talk with them about getting a commercial loan on your 4 plex properties. Terms will likely be 20-25 year amortization, 5-10 year fixed at 4.5-5.5%. Don't give up after only a few banks

 Image result for dave ramsey crying

If I have 6 financed properties I can go get a 7th financed property. It’s not that hard to find banks that go up to 10 financed properties with conventional 30 year fixed mortgages. But if I were to try to get that 7th financed property with a friend who has 4 financed properties, then that means together we already have 10 financed properties (6 + 4), which is the limit. At that point ditch the friend or go commercial. 

I echo Mike, I'm in the same boat, 30+ local mortgages. Small local banks are the way to go. Short 20-25 year amortization and 5-10 year fixed are the only drawbacks. But with them, you'll just be limited by how credible you are to the banker and their bank board. Show good performance on your existing properties, and be a credible buyer and you won't have a problem.

I have never used my conventional slots, though, until recently. I'm picking my highest dollar properties and getting them on 30 year fixed FNMA loans until I hit my 10, that keeps the cash flow high on those and locks me in at a decent rate.

@ROBERT Richards I got 15 rental properties financed this year through a local bank in Phoenix. I've really enjoyed working with them.  But you need to build a relationship with them first and have a good track record. Send me a PM and I can give you their name.

You need to transition with commercial loans.   People own 1000s of units, and they get financed.

Basically, make some appointments with banks and talk to their lending department.  They will underwrite the properties far differently than a conventional loan, which just goes off of appraisal and your credit.

I ran into this some years back. Until you understand the whole logic behind the process, you'll be totally bewildered. The formulas they  use is for ordinary Joe's buying their own homes, but totally bogged down when applied to serious investors.

I ran into this some years back, in 1993, when interest rates came down from rates of 15% to 7%. To a rational person, if you were paying mortgages of 15%, of course I can pay 7% with ease particularly if I had the properties for over 10 years, and rents went up considerably.

But not if you talk to a loan processor.

I submitted two mortgages to refi, no cash out, same amounts as before, on the same day. One mortgage was approved, the other was not. Even the manager of the local bank where I submitted the paperwork couldn't understand it. And my logic was, I have three mortgages, whip out my checkbook, and write three checks a month, and the rents greatly exceed the payments. What gives??

It turns out one property I own totally, the other with my mother in law, so one mortgage was analyzed resulting in one DTI, and the other includes 3 more properties that my mother in law owns, resulting in a higher DTI. But I said the 3 others she owns with her son who's a doctor, and did you include his income? That should bring the DTI down wouldn't it?

The loan department got to work on it, asked for my brother in laws info, turns out he owns properties with fellow doctors, so that would add even more properties.  So I told them, the way you're doing it, before you're done, you'll ask for info on every doctor at San Francisco General where he works.

At that time, I had a wealth account at a major bank, haven't thought of calling them for a mortgage. I told them the sad story, they looked at me and said "we couldn't have given you the mortgage already, and there's no need to drag every doctor in from your brother in laws hospital to do your loan". You're good to go, based on net worth and relationship.

So the trick is, try different banks, portfolio, commercial banks, or ones you have a wealth account at.

Originally posted by @ROBERT Richards :

I was writing to ask your advice. I sold one home this year and i am trying to releive some of that tax burden by buying a 4 plex with less than 90 days to go. I am being told i have too many mortgages, 12. I have a great FICO score and plenty of reserves. Where can i go to get a mortgage. Any ideas would be great. I can't be the only one with this kind of problem. I was thinking i should find a FISBO or go commercial. What would you do.

 Many banks will let you do 10 mortgages. After that you should look to move into the commercial space. 5 residential units+. There is no limit to how much commercial financing you can obtain. Commercial lenders generally would not be interested in having anything under 5 units in their loan portfolio but you can try to see if you can obtain a commercial loan on it though.

Note that commercial terms are not as friendly as those 30 year fixed rate mortgages your used to. Expect 10, 15 or 20 year ammortizations with the payoff due in 5 or 10 years.

As others have said, go the commercial route with smaller portfolio lenders.  You will never look back.  Way easier underwriting, approvals, etc.  Lots of smaller banks don't even make you get appraisals if the loans are under a certain threshold.