Multiple Homes = Multiple mortgages .. how to afford multiple?

[Andrew Bissada]

I was thinking about whether I would prefer to do a higher down payment on my first purchase so that my monthly mortgage payment is lower, or to do a lower down payment so I can save for a second home in another year or two.

And it got me to thinking, how is anyone able to afford mortgages on multiple homes?

If you make enough money that you can afford the first home, but that's it, how do you go about the suggested path of continuing to buy new homes every 2 years? Salary is not likely to double every 2 years to make this possible. What am I missing?

[Andrew Goodwin]

@Andrew Bissada Currently have 3 mortgages. Basically, once you have a second property, you're able to use the "net profit" from that property as additional income, which lenders use based off of your tax returns.

Larger down payments will reduce your debt to income ratio, but as you stated, it will cause you to grow more slowly. That's the strategy that my wife and I are using and feel comfortable with. We have done conventional loans in order to avoid PMI and have a better dti ratio, but by no means is that your only option. Many people will tell you that putting down as little as possible upfront is a much smarter way to go. There are pros and cons either way, so it's really up to you!