If you’re already a homeowner with a mortgage on your primary residence and you’re hoping to finance the purchase of a vacation home or you’re looking to get into real estate investing and want to finance the purchase of more than one rental property, you may be wondering just how many conventional loans you can have.
The quick answer is you can have as many conventional loans as you can afford. However, the more mortgage loans you have (or hope to take out), the more requirements you’ll have to meet in order to qualify for financing. We’ve compiled a list of conventional loan facts and a guide on how to determine how many conventional loans you can have to help make it easier to understand financing for multiple properties:
What lenders will want to know when you apply for multiple conventional loans
How many conventional loans you can have will depend largely on whether or not you can afford to meet the mortgage payments for the properties you already own as well as for those you intend to purchase. Here are some things to keep in mind when you apply for a conventional loan to purchase a second, third, or even multiple homes for personal or investment use:
- Most lenders will approve conventional loans for up to 10 properties if you can demonstrate the ability to cover the mortgage payments. Keep in mind, however, that total includes your primary residence if financed.
- Lenders will still want to know the number of homes you own (even if not financed) when you apply for a new mortgage, as they’ll want to consider your ability to pay real estate taxes and homeowners insurance on those properties. So be sure you include all the residences you own when you apply for financing.
- Your financial institution may want evidence of payment reserves showing you can cover the expenses of all the homes you finance, especially if you finance more than four. You’ll need to demonstrate you have easy access to these cash reserves in the event you need to cover payments for all your properties for several months without income.
- Your lender will also want proof you’ve been consistently meeting mortgage payments on time for any properties you have financed and will want proof that any homes you own outright have no liens against them.
Extra documentation you may need for multiple conventional loans
While you’ll have to meet a lot of the same requirements and provide much of the same documentation in applying for additional conventional loans as you would if applying for one mortgage, expect some extra paperwork from your lender. Your financing institution will want to make sure you can manage the expenses of owning multiple properties and will also want to ensure you’re making money off any rental properties you have.
Expect to provide the following additional documentation:
- Proof of any paid-off mortgages for homes you currently own and documentation showing there are no encumbrances on their titles
- Copies of notes for private or seller-financed residences you own
- Copies of mortgage statements for properties you own
- Documentation showing HOA fees for each home
- Copies of any current leases on the homes you own
- Copies of closing statements on any properties purchased in the last 12 months
- Current property tax bills for each residence you own
- Documentation of homeowners insurance premiums for each property
Your lender may also require you to submit a rental income analysis with appraisal for homes you rent for income.