Can I buy two homes with One Mortgage?

Question

Hi All,

I am relatively new and I was wondering if I could bundle two homes into one mortgage.  Would that increase or decrease my interest rate if allowed?  I am looking at two student rentals with decent cash flows for my first deal and I want the lowest interest rate possible!

Thanks!

Dan

Andrew Syrios · Answer

It's called cross collateralization and it can be done, but you'll be hard pressed to find a bank that wants to do it (unless it's a package of properties you're buying at once from the same seller perhaps). More likely it will be a private lender of some sort.

Sometimes, we refinance several properties with one blanket loan, which is really just done for simplicity's sake as the total loan value is just what all of the individual appraisals added up to.

Bill Gulley · Answer

It will be a commercial loan. Post a new thread, this is a year old :)

Scott Byer · Answer

To add a nuance to Daniel's original question about bundling 2+ properties into one loan:

I'm looking purchasing at least 2 properties that will likely appraise for under $50,000 each.  I understand these mortgages are hard to get from traditional lenders.  Is a sub-50k mortgage easy to get or portfolio loan?  My current plan now is to visit some local bankers and build a relationship.  I've heard they are more willing to do these small deals. If you agree with this strategy, do you think credit unions or banks are my best bet?

Jay Hinrichs · Answer

@Daniel Savage

this can be done however is generally done with commercial loans... developer loans etc.

you will not see it in the conforming loan product bought by fannie and freddie

Jeff V. · Answer

@Daniel Savage

I have heard of taking say 5 or more properties and rolling them into a portfolio loan that covers all 5.  In all cases though I think there was a minimum of like $500k for the loan value before they would consider it.

I'm sure it's possible for 2 but like @Scott Trench said, it's probably more hassle than its worth trying to get it done for only 2.  Also very few lenders will do the portfolio loans that I mentioned above, they are kind of a specialized niche market.

Good Luck.  I would stick with 1 mortgage per property until you have a sizable portfolio.  Just my 2 cents.

Daniel Savage · Answer

Thanks Scott! No, these are two differenet houses.  I was just wondering if people actually did that.

Scott Trench · Answer

@Daniel Savage - What you are talking about is possible, though rare to my understanding.

If they are two entirely separate structures unrelated to each other in any way legally, then I believe that you will experience a lot of trouble and few advantages in attempting to bundle both properties under one mortgage.  You may experience higher interest rates, fewer lenders that are willing to work with you, and you will likely pay higher origination fees upfront to finance the properties in this manner.

I think you may have a much easier time purchasing the properties separately, especially if this is one of your earlier investments.  In most cases that I can imagine, if you have the capability of financing both properties under the same loan, you will have the ability to finance them both separately as well, and likely cheaper.

If I misunderstood your question, and the properties are being sold as a single entity - for instance, as two parts of the same duplex - you can absolutely finance them both with a single loan.

Hope that helps!

Can I buy two homes with One Mortgage?

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