How many mortgages can you have?

Question

I've heard 4 and 10?

What I'm thinking about doing is buying a house once a year moving every time, so essentially I would have 4 OO financed rental properties.  Each time cash out refi-ing up to 80 or 90% and using the money for cash flips or cash buy and holds.  Is the mortgage limit 4, or could I theoretically just keep doing this over and over.

David Krulac · Answer

Asher Anthes

Some banks 4 some banks 10.  A couple strategies that can increase that number.  If married, spouse can get 10.  And some banks, typically brick & mortar, as well as credit unions will do "portfolio" mortgages where they don't sell to Fannie and Freddie.  The limit is set by the individual lender.

Then there are "commercial" mortgages not governed by Fannie & Freddie rules.

And then there are seller financing and private lenders.

So virtually no limits.

Paul Donoghue · Answer

Hi Asher,

I have 12 mortgages.  I deal with local banks that hold onto the mortgage and that do not sell or package it to a secondary market.

Asher Anthes · Answer

Lynn M.

I already bought and cash out re-fied my first house.  I gained equity because I bough well below market value ($105,000) and did some repairs and two years later it appraised for $175,00.  So, I want to apply the same principal to the next property, and the next one until I've built up $100,000 to $150,000 in cash that I can use for flipping or buy and hold.

David Krulac · Answer

How many mortgages can you have?  As the commercial says, infinity times infinity.  Beyond the Fannie limits, there are portfolio, commercial, private, and seller.  There effectively is no limit.

Asher Anthes · Answer

Debt to income ratio is not a problem for me.  Because over the last two years, I've been renting out rooms of my house to friends, and have claimed this income on my tax returns.   This income basically washes my mortgage off my debt to income ratio, and then gives me more income after that.  So, right now I can keep my current house and still get another on up to $280,000.

William Brace · Answer

Asher Anthes Alot of banks will tell you the Fannie limit is four financed properties. That's because the loan officers read from a script and really have no idea. The Fannie limit is ten financed properties. Where the four limit comes into play is when a given bank has their own overlay on the guidelines limiting their own bank to four. It's their policy, not a Fannie policy. They are just misinformed.

Deborah Burian · Answer

As many as you can talk your friendly neighborhood banker into.

Lynn McGeein · Answer

Asher Anthes, We bought our first few investment properties with our principal residence HELOC as well, paid cash, then cash-out refi to an investment loan, pay off the HELOC, then repeat.  But that was years ago when it was much easier to do so.  It seems like a good plan if you are willing to move every year or so.  Just keep in mind the rules about DTI ratios and not counting rental income from primary residences for 2 years.  If you qualify anyway, should not be an issue.

Mehran K. · Answer

FNMA guidelines is 10 loans. They have different underwriting requirements (more reserves etc) for 5-10. Many lenders will have their own overlays and only allow the first 4.

This applies only to conventional loans.

Matt Devincenzo · Answer

Not quite, and yes sort of. A cash out refi is any refinance that is done for a higher amount and will give you a check for cash. So if you have a HML and you can appraise high enough where they will pay off the underlying debt and then still have extra you could get that money as cash to you. Be cautious this is a strategy that can build some capital for additional investments, but remember you're robbing Peter to pay Paul that money came from someone else and has to go back eventually either through payments or sale.

As for time frame maybe as little as 6 months, but it will be best to talk to the specific lender you plan to use and find out for sure.

Yes it used to be a year for a cashout refi, now apparently some will do 6 months. Also you need to understand the HML is a mortgage it is just not a conventional loan, so you could do just a rate and term refi (no cash out) sooner than 6 months possibly.

How many mortgages can you have?

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