I currently have 5 conventional mortgages. I have another 3 properties under contract with a partner. If both of our names are on the loan, it counts towards the ten mortgage limit for both of us, which seems wasteful. Is there any sensible way to get around this? For instance, if both of us owned the house but only one of us was on the mortgage? Is that even possible?
Yes Steve - it's being done all the time. One of you can be on the loan and both on the deed. Or if the lender does not allow you to do that, get the loan & the deed in one person's name and then that person will deed the property to an LLC owned by both of you. By doing this, each person can get 10 properties each.
Having said this, the only possible limitation is the debt to income and reserve requirements - i.e., if each of you can really qualify for 10 total loans.
I was told no by my lender who is a mortgage broker and they always sell the loan, portfolio lenders may be different. I was told co signers don't really exist anymore. You're either both on the deed or the loan is only in one name. No bank is going to tell you you can deed it to an llc after closing. Will they actually call the note if you do so? Who knows, I've never wanted to find out. For this reason my wife and I buy properties in our individual names, we can each get to 10 properties. If you want to get a loan in an llc you will have to go with a commercial loan.
In the past my wife and have jointly purchased properties because we needed both of our incomes to qualify. We later refinanced them in one of our names, you might have to wait a couple years to do so but unless you would hit your 10 property max before then it might be your best bet. The sooner you can buy them the sooner you can have them on two years tax returns and if they are cash flowing could be converted to either persons name without hurting dti ratios.
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