How many 2nd home mortgages can you take?

Question

I have it in my head, probably from listening to many many REI podcasts, primarily BP, that one can only take out a single 2nd home mortgage at a time. If you wanted to do an additional 2nd home mortgage, you'd have to pay off the first or do something creative to "release" said mortgage product.

Do I recall incorrectly? My mortgage broker tells me that there is no limit, but this doesn't seem right.

Do I recall incorrectly? My mortgage broker tells me that there is no limit, but this doesn't seem right.

Adrian Herrera · Answer

Hi Mason,

My apology, I misunderstood.

However, your broker is still giving you accurate info. You may take out multiple second home mortgages. As long as the property in question meets the criteria for a second home/vacation home, it is allowed.

The requirements are below...

Single Family Homes only.

Must be 30 miles away from your primary.

Cannot use rental income to qualify (When purchasing a rental prop, we can use 75% of the market rent)

If these requirements are met, we can acquire the property with 10% down.

Mason Blake · Answer

@Adrian Herrera That is fantastic to hear. I wonder what it was that I am mis-remembering.... 🤔 Perhaps that only 1 per state is allowed?

Either way - good news! Thank you.

I am on my way to finally purchasing my first property. Just got into contract yesterday. An STR 1/1 condo on the beach in Maui with 180º views of the ocean! I'm stoked!

Sergey A. Petrov · Answer

There is only one “2nd”. The next one would be “3rd” and I am unaware of any lenders willing to be in a third position. But you can have a 2nd on Property 1 and a 2nd on Property 2 giving you two seconds

Mason Blake · Answer

@Jonathan W. is correct. I am not talking about a 2nd mortgage on the same title/home. I am talking about a "2nd home" as in literally a 2nd property, purchased through a "2nd home mortgage" whereby I can get 10% downpayment instead of an investment property mortgage with 20%+ down payment.

@Adrian Herrera how does that change your answer?

Jon Martin · Answer

I think the OP is talking about a "vacation/2nd home loan" not a 2nd mortgage on a single property. The advantage being that only 10% down is required. To answer that, yes, from what I understand you would have to refinance out of it or pay it off in order to free up that loan for another property.

Sergey A. Petrov · Answer

I stand corrected! What rate upcharge does a 3rd come with?

How many 2nd home mortgages can you take?

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