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"How Many Mortgages Can I Have?"

Jerry Norton

Aug 8, 2024

green trees near red and white house under blue sky during daytime

If you're interested in investing in real estate, your biggest question will be about financing these properties. 

The most traditional way to finance your real estate investment is with a mortgage. 

So, if you want to invest in multiple properties, how many mortgages can you have? 

In this guide, we’ll break down everything you need to know about how many mortgages you can have to help you decide if this financing method is right for you. 

How Many Mortgages Can I Have?

Let’s get started by answering the question straight away.

The short answer is that, for most traditional lending institutions, if you have good credit, combined with a hefty down payment, you can have up to four mortgages. 

That being said, there are instances in which you can have more than four mortgages. 

Back in 2009, Fannie Mae raised the financed-property limit from four to ten. But having more than four mortgages requires several hoops to jump through and can be difficult to obtain. You’ll need the following:

  • 25% down payment on each property or 30% down payment for duplexes, triplexes and quads
  • A minimum credit score of 720
  • No late mortgage payments on any property in the last 12 months
  • No bankruptcies or foreclosures in the last 7 years 
  • Six months of cash reserves to cover PITI: principal, interest, taxes and insurance 
  • And more

Mortgages Explained 

Now that we’ve answered how many mortgages you can have, let’s take a deeper dive into what a mortgage is. 

After all, before you choose this financing method, you’ll need to be certain it’s right for you and your real estate investing business. 

Simply put, a mortgage is a loan that is used to purchase a property. It is secured by the property itself, which means that if the borrower fails to make the payments, the lender can take possession of the property.

There are several types of mortgages to choose from as well. These include:

Fixed Rate Mortgage

When you think of a mortgage, it’s likely a fixed rate mortgage — this is the most frequent type of mortgage. 

As the name implies, this type of mortgage has a fixed interest rate for the life of the loan. 

This means that your monthly mortgage payments will stay stable and predictable during the length of the loan. 

Fixed-rate mortgages are popular among homeowners and investors who desire a stable payment schedule and do not want any shocks in their monthly budget.

Adjustable Rate Mortgages

Adjustable-rate mortgages (ARMs), on the other hand, provide a variable interest rate that might fluctuate over time. 

ARMs typically begin with a fixed rate for an initial period of 3 to 10 years. 

Following the initial time, the interest rate is adjusted on a regular basis based on market conditions. 

This means that your monthly mortgage payments may rise or fall based on the current interest rate, certainly different from a fixed-rate mortgage. 

ARMs can be advantageous for homeowners who expect interest rates to fall or who want to sell their house before the rate adjustment period begins.

Interest Only Mortgage

The interest-only mortgage is another type of mortgage where borrowers have the option of paying only the interest on the loan for a set length of time, often 5 to 10 years. 

This means that the monthly payments will be cheaper during the interest-only term compared to a regular mortgage. 

When the interest-only period expires, borrowers must begin paying both the principal and interest, resulting in larger monthly payments. 

People who predict a rise in income or who intend to sell the home before the principal payments begin may benefit from interest-only mortgages.

Now that we’ve broken down the types of mortgages, let’s take a look at the factors that influence whether or not you can get multiple mortgages. 

Factors Influencing Multiple Mortgages

Credit Score and History

One of the most critical factors that lenders consider when evaluating your eligibility for multiple mortgages is your credit score and history. 

Having a high credit score demonstrates to lenders that you are a responsible borrower — who pays their debts on time. 

If you’re wondering how many mortgages you can have, and you’re interested in having multiple mortgages, an excellent credit score — 750-820 — is a required. 

Income and Debt-to-Income Ratio

Your income and debt-to-income ratio are also significant factors that lenders consider when evaluating your mortgage applications. 

Why?

Lenders want to ensure that you have sufficient income to cover the monthly payments for all the mortgages you have, along with any other financial obligations you may have.

When it comes to securing numerous mortgages, having a consistent and trustworthy source of income is critical. Lenders will look at your salary to see if you have the financial resources to handle the added loan. 

A high debt-to-income ratio, in which a large amount of your income is already dedicated to debt payments, will make it difficult to qualify for new mortgages.

Property Value and Equity

The value of the properties you already own, as well as their equity, can also impact your ability to obtain multiple mortgages. 

To obtain multiple mortgages, lenders may require a certain level of equity in your existing properties to approve additional loans.

If you have built up a significant amount of equity in your existing properties, it can serve as a valuable asset when applying for multiple mortgages. 

The Bottom Line: Multiple Mortgages 

As a real estate investor, you can have multiple mortgages: up to 4, and in some scenarios, even up to 10. 

Obtaining these mortgages, even with an excellent credit score, excellent debt to income ratio, and significant equity, can be difficult. 

This is why it’s important to keep in mind that having multiple mortgages is just one of many ways to finance your real estate investment. 

And that’s exactly why education about real estate investing is so critical. By knowing the many ways to finance your next real estate investment, you can make the best and most profitable decision now and in the future.