Jul 29 • 👋 Thomas Q&A
2 Mortgages looking to buy more
How willing would a bank be to do business with someone who already has 2 mortgages, the most recent one being a freshly 6.9% rate mortgage?
Transcript:
0:00 Alright, so another good question was asked, uhm, by June, uh, so he has two mortgages, looking to buy more. So he wants to know how willing are banks able to do business with someone who already has two mortgages, but then wants to most recently had a 6.9% interest rate. 0:20 Uhm, so an interest rate doesn't mean anything to another bank, uhm, that's going out to lend you, uh, lend for you. 0:29 Uh, what the banks care about is, uhm, are you capable of paying back the loan? Uhm, so if, it all depends on your debt-to-income ratio. 0:41 So it depends on how much you're bringing in versus how much debt that you have. So they are going to count the debt that you owe. 0:48 On the two mortgages and those payments that you have monthly. Um, but then they'll also take into account how much income you have. 0:57 Um, but they'll also account, you know, other things like, well, the personal debts. So you have loans, car notes, student loans, things like that. 1:05 All that goes into your debt and what they like to see is like, you need to be under, I believe it's 43%. 1:14 That's a max that they'll loan up to like your debt to income can't be more than 43% of your total. 1:21 So, uh, your total gross. So as long as you're under 43%, as far as your debt to income, and I'll send you a link to my debt to income calculator where you can put in, you know, how much you make and what debts, what debts you have, where you can calculate. 1:37 Calculate that, uh, easily. Um, but as long as you make more, you know, enough to cover the bills, uh, they'll lend to you, um, and your personal name, you can get up to 10 mortgages, I believe at a time. 1:51 Um, so. So that's what you can do, but what you really want to do is you want to start getting this stuff out of your name. 1:59 So this is when you can set up an LLC and purchase a property in the LLC. So therefore it's not in your personal name. 2:09 It's in you'll be a personal guarantor, but it's not going to be in your personal name. All right. So with that being said, you can purchase a property. 2:19 Um, and you can use a strategy called, um, what I would say for you is, uh, um, a DSCR loan, which is a debt service coverage ratio loan. 2:33 So if you could find a property that's on a market that, um, or off the off market property that where that's the same say like it's a three bedroom, two bath house. 2:46 Um, you find this, my selling it. And you know that if you put a renter in there, that's, let's say the mortgage is, $1,500 a month for that property, if you were to purchase it. 3:03 And if you put a renter in there, they'll be paying $1,800 a month. Like for a debt service coverage ratio loan, like as long as the debt can be covered by the tenant, these lenders will lend you the money. 3:20 They'll lend you up to normally 80% of the, uh, property value. So you'll have to come up with the other 20% to put down. 3:30 So you can easily find properties out here, stick a renter in there that covers the mortgage and gives you cash flow, um, to pay down your loans. 3:41 Um, so that's the option I would look into. Um, you just mentioned, um, LLCs. So this is when you start, uh, purchasing property and LLCs where you're not getting them in your personal name. 3:56 You're not using like FHA loans. You're using, uh, private money, hard money loans and things like that. So what you can do is you can start, start a new LLC. 4:12 Now this one is just, you know, for this particular property, let's just say one, two, three main street. You, you set up one, two, three main street LLC, purchase this property under that LLC with the DSCR loan. 4:27 You come in with the 20% and you rock and roll. Um, but there's other strategies too that I can get into. 4:34 Um, other creative ways to get into the properties, um, take over mortgages, um, by doing something called a subject to, or you can do, um, it's a lot of creative strategies. 4:50 You can into, but, uh, I don't want to draw this out too long, but, uh, I was looking to getting a DSCR loan to purchase the next property. 4:59 You can come up with 20%, start the LLC. You have good credit. You can get some business funding to help. 5:06 Pay for that down payment and like you can really get a property with no money out of pocket. You know, if you really want to go that route, you know, let me know. 5:16 We can talk further. All right. So that's just to answer that question.
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2 Mortgages looking to buy more
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