Can I have 2 MortgagesMay I have 2 mortgages?
If several mortgages are recorded on a particular piece of real estate, the most important factor to consider is capital. Shareholders' capital is the amount by which the value of the real estate differs from the total value of your mortgages. Some mortgages, such as FHA loans, let you go on 97 per cent Loan-to-Value (LTV) for a individual mortgage. 3.
In order, however, to have a subordinated mortgages on a real estate, the vast majority will only allow up to 80 per cent LTV. That means that your first hypothec must be even smaller. So for example, if you have a $250,000 on a $500,000 home loan, your LTV is 50 per cent.
Eighty per cent of $500,000 is $400,000. If you deduct the $250,000 first hypothec, you will receive $150,000 in capital. Every supplemental mortgages must be the same or less than $150,000. If you have several mortgages on several homes, it is important not only to have enough capital in each home, but also enough revenue to back the payment on each one.
Whilst returns are an important consideration in all mortgages, several real estate assets bear several costs. You not only need to keep your payment up to date, but also have tax and insurances for each and every real estate. The majority of bankers want to see that your debt-to-earnings ratios do not exceed 40 per cent.
That means that all your debts, up to and incl. payment on several mortgages, must not exceed 40 per cent of your earnings. One more important thought if you have several mortgages is whether you want to keep them all with one creditor or distribute them. Keeping only with a creditor has the benefit of allowing you to establish a bond, which in turn can facilitate the credit application for you.
At the same on the other side, a stay with one of the lenders can cause you to miss the chance to take advantage of lower interest rate and special offers with others. If you have several mortgages, you need to administer them well. Find out whether it is more convenient for you to make your payment at the same moment or spread it over the course of the year.
When you have several mortgages with one creditor, ask if you can adapt your terms of repayment to your needs. No matter what you do, make sure you make your money on schedule. Otherwise, you may find it hard to obtain prospective mortgages.