Start one mortgage while closing on another?

Question

I currently have a property under contract (closing 6/18). I now see another property that looks promising can I start another loan while closing on another. How does that work exactly

Jill Addison · Answer

@Nneka I. I currently have three loans in process at the same time. I've been buying properties quickly and so it's getting a little hairy with providing all the paperwork they want. Some things they've been asking for for each property are: 1) note 2) copies of leases if they're currently rented 3) cancelled checks for the most recent month's rent 4) purchase and sale agreement for each property. The thing that's making it difficult is that some of these properties were estate sales and so the name on the purchase and sale agreement is not the same as the name of whoever was collecting rent checks, or whose name is on the lease, which is a problem for the lender because they need to be able to draw a straight line to correlate all the paperwork on one property. One person I'm buying from had the property for 30 years and can't even find her original leases. There are workarounds and ways to address all this, but when you multiply the number of properties with a number of issues and a short time frame to get it all worked out, it does get hairy. The other thing is you have to make sure that you have enough for all the down payments plus reserves to support multiple properties at the same time. I'm kind of seeing the wisdom of going a little bit slower so you can not have the lending situation be so crazy with multiple things in motion at the same time, plus I'm seeing that it would be wise for me to put the brakes on a little bit so I can make sure that all these properties will rent for what my property manager told they told me they would, before I keep going.

Bill B. · Answer

The upside is you and they save a bunch of work submitting all the paperwork again.

This should be a non-issue if you qualify. I’ve purchased multiple homes each with new mortgages the same day.

Caroline Gerardo · Answer

If you are working with a competent mortgage broker he/she should be able to handle both transactions.

Jill Addison · Answer

I just saw this question (sorry, it's been 2 years since you asked, ha ha). Anyway, I did end up closing all THREE loans! One of them has turned out to be my very best property, consistent high rents and very few repairs. Thank you, God!

Nneka I. · Answer

@Jill Addison How did it all turn out. I closed on my duplex via a small local bank. I am working on my second deal along with looking at larger apartments

Jill Addison · Answer

@Nneka I. Well, it's been almost a month since I posted my response to your question here, and my three loans still are not closed. It has been so messy. We got all the way up to the final hour and then the wholesale lender said they didn't want to close them because they thought I was "shotgunning" a bunch of loans through the same time, and Fanny man Freddie Mac "red flagged" me. I didn't have enough rental history on each one and it was hard for me to supply the leases because there were four properties in play at once that I didn't own but I was in the process of buying. So at this point we've had to flip all my files over to a new wholesale lender and go through the whole underwriting process again. I'm not sure if I'll still get a favorable interest rate or not. I'm not even sure if these loans will close. But I'm still thinking they probably will. But they are closing literally a month later than the original closing date. Luckily my sellers are sticking with me, they could get out of the loan because I haven't been able to close it on time, but they're staying with me so that's good. Hopefully I will be able to close these in the next 2 weeks. Going forward, my approach will be to not have more than two loans and process at the same time.

Nneka I. · Answer

Thank you for all the amazing responses.

Sonia H Reyes · Answer

Its a great time to process another loan because they have all your current information! I bout 2 properties in feb8 and it's was great.

Andrew Postell · Answer

@Nneka I. this should be doable as long as you have the assets available for it.  This is such a specific question to your scenario I would recommend with speaking with your lender as soon as possible and talk it through with them.

Start one mortgage while closing on another?

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