Many of us dream of one day owning our own home. For some, even better than owning one home would be to own a second home – perhaps for a vacation house or simply to own extra property to rent out.
However, financing one house is not easy, let alone two of them. To qualify for a mortgage for a single property, you need to be financially stable, and even then, it is still not easy to purchase a house.
But what about if you want to own more than one home and need to borrow money for both? Can you have two mortgages at once? Will the government or lending institutions even allow that?
Today, we will share whether you can have two mortgage loans or not.
Can You Have Two Mortgages At Once?
Yes, you can have two (or more) mortgages simultaneously. However, purchasing two houses simultaneously is not easy and will require extra financial stability and capability.
Fannie Mae is a United States-based mortgage lender. You can simultaneously have up to ten home loans with your name on them.
These standards for Fannie Mae have changed over time. It used to be you could only have up to 4 loans at the same time, but that has increased to 10.
On the other hand, having two home loans is challenging. One of the difficulties of having numerous mortgage loans is dealing with mortgage lenders.
Because multiple loans make you a more significant lending risk, mortgage lenders will be more careful about approving multiple house loans. Lenders may be hesitant to provide you with several home loans.
Part of a financial provider’s willingness to lend, for example, will be based on the purpose for which you intend to use the property. Whether or not you intend to occupy a unit vs. creating rental property income will influence mortgage loan decisions and the number and type of mortgage you can receive.
The primary challenge to having several mortgages is your ability to pay them off. You will need to analyze your financial situation to determine whether you can afford two mortgage loans.
How To Get Two Mortgages
Now how do you purchase two mortgage loans at the same time?
The first step is to determine how each property will be used. Before looking for a new home, you’ll need to decide if one of the properties will be utilized as a second home or as an investment property to generate rental revenue.
Alternatively, you’ll need to decide if one of these residences will be your primary dwelling or a secondary residence for family members. Then, you need to know your financial capabilities, as stated earlier.
Next is that you need to look for the most suitable houses. Shopping for two houses at the same time is even more difficult.
Discuss your goals and plans for the two houses you intend to purchase with your real estate agent. You can identify qualifying properties by searching MLS listings and prominent real estate websites and driving around communities where you want to shop.
Then, look for qualifying or good mortgage lenders for the properties you plan to purchase. Once you find suitable lenders, apply to them.
Keep in mind that no two financial institutions offer mortgage loans with the same terms and circumstances, whether they are banks, credit unions, or online mortgage lenders.
As a result, while evaluating two offers, you’ll want to perform considerable research ahead of time to compare down payment amounts, credit score and history requirements, interest rates, term lengths, closing expenses, and other aspects.
Finally, you will prepare and pay your down payments and choose closing dates.