two mortgages?

Question

I have been shopping investment properties and found a few good deals in different states.   My question is, will I have trouble getting loans for these deals at the same time?  I have enough money for both down payments
thanks!
doreen

Brian Levredge · Answer

Depending on your financial situation, you may not qualify for either if you do them at the same time.  Conventional lenders will want to see down payment money for each property AND six months reserves for the PITI on each property you want to buy in addition to the residence you are living in currently.  In addition, they are going to look at your DTI ratio with both loans in place as well.  You probably won't be allowed to use potential rents to offset the mortgages so be prepared to qualify on your own.

Eric Byrd · Answer

Doreen,

Brian pretty much has this covered... To get multiple loans in todays environment will be difficult, if you are using conventional loan methods. Plus, if you already have an existing loan, getting a 2nd for income property, you will need a significant down payment and getting a 3rd...well... I'm sure others will chime in. If you plan on financing and holding the properties, you can't continuously get loans. Debt to income and many other factors will stop that.

Are you planning on selling the properties quickly?

You also mentioned you have enough for down payment. By enough are you referring to 25%?

Hope this helps....

Brian Levredge · Answer

DTI is Debt to Income.  It is a ratio the banks use when determining the credit worthiness of a borrower.  The bank takes your gross monthly income and then adds up all your other monthly debts such as credit card, car payment, rent/mortgage on your primary, It then divides that total by your monthly gross and arrives at a percentage.  The lower that percentage (0-20%) the better.  If it's in the 30's, 40's, or worse, you could have a pretty hard time getting a loan because the new debt will throw things out of whack.

Conservatively, it would be better to buy just one first and get it stabilized.  You will make mistakes which is why it's better to make the same mistake once instead of twice.  If you are looking at multiple markets, I would really research things well.  Just because something is cheap relative to where you live, it does not mean it's a deal.   If you are serious about buying, you want to find a lender or mortgage broker you can work with.  They can give you better advice once they see your financial situation.

Doreen Arminio · Answer

Well, I have enough to downpay on the properties and have some more cash.  I Don't have a current loan.  How long would I have to wait after buying the first property to start getting another one?   I don't know what DTI and PITI is?
thanks Doreen

Scott R. · Answer

What happens if, you were to use two different lenders and close on the same day and not tell eachother about the other one, is that illegal? never really heard one way or another, im just thinking if you did it on two different properties, they pull credit like a week before you actually close so they shouldnt catch the new account as its not created yet right?, hope its not illegal but guessing somehow it is?
 -Scott

two mortgages?

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