Successfully applying for even a single mortgage can be a challenge, but exactly how many mortgages can you take out at the same time? Assuming you have a good reason for purchasing more than one property, how many mortgages can you realistically expect to be offered?
The short answer – as many as you like! If you meet the necessary criteria, there is nothing to stop you applying for any number of mortgages. Before doing so, however, we strongly suggest seeking independent expert advice.
Qualification Criteria to Consider
The process of applying for additional mortgages can be slightly trickier than applying for a conventional mortgage. Some lenders simply do not offer second home mortgages to any applicants under any circumstances. Others will restrict the number of properties allowed in your portfolio, while there are those who impose unique conditions regarding your intended use/occupancy of the property. Every lender has its own unique policies where multiple mortgages are concerned – some being far more restrictive than others.
The primary criteria that will determine whether your application passes the first stage will be the same with every lender. The most important examples of which include the following:
1 – Can you afford the mortgage alongside your existing debts? When applying for multiple mortgages, it is not quite as simple as just assessing your income, your financial status and so on. The lender will also need to ensure that you are well on top of your current mortgage debts and general outgoings, which may require additional supporting evidence.
2 – Is your track-record and credit history up to par? Specialist lenders tend to be far more flexible where issues like imperfect credit are concerned. You will always be expected, however, to provide evidence of a reasonably strong, stable and responsible financial track-record.
3 – To what extent will the proposed investment pose a risk? It is the norm to be asked for clarification of your intentions for the property you intend to buy, during the application process. Your lender will carefully consider the potential risk and exposure of the investment, both immediate and long-term. For example, if you are looking to buy a property in a block that is falling apart or in any way blacklisted, you may be turned down.
4 – What are your expectations? It sounds obvious enough, but the lender will also want to make sure that you know what you are getting yourself into. Diving headfirst into property investments – particularly where buy-to-let is concerned – without careful consideration can prove disastrous. It is not all about the money – you also need to ensure you know what you are doing and have a good reason for doing it.
How Many Buy-to-Let Mortgages Can I Have?
The rules regarding buy to let mortgages are subject to the same rules and restrictions as multiple mortgages. If you are able to demonstrate the strength of your financial position and your capacity to comfortably repay the loan, you will most probably qualify.
Most buy-to-let lenders base their lending decisions on the rental income projections of the property in question. Hence, your eligibility may be determined (to some extent) by the monthly rent you intend to charge and your profit potential.
Borrowing with No Proof of Income
It is not always necessary to provide any personal proof of income to qualify for a mortgage. If you own and operate one or more buy-to-let properties in the UK, your eligibility may be assessed primarily or even exclusively on your rental income. If your combined rental income from multiple properties covers the costs accordingly, you may be able to qualify for another mortgage with no personal proof of income whatsoever.
This is something that varies significantly from one lender to the next. The more complex your case, the greater the importance of taking your business to independent specialist lenders. Where multiple mortgages are concerned, you may find it difficult to have your case heard fairly by a mainstream bank or lender.
How Many ‘Main Residences’ Can I Have?
Along with your financial status and general track-record, the type of mortgage you apply for will affect how much you can expect to pay. Anyone who applies for a second residential mortgage will be required to nominate one of the properties as their ‘main residence’. This is because residential mortgages on a main residence are usually (though not always) the cheapest mortgages on the market.
Mortgages taken out on properties with other purposes in mind – buy-to-let, commercial applications etc. – can be more expensive.
This doesn’t mean it is impossible to have more than one residential mortgage. For example, if you intend to purchase a second property to use as a weekend home in another location, you may qualify for a second residential mortgage. The same also applies if you would like to buy a property located closer to immediate family members, but do not wish to sell the home you live in.
Multiple Commercial Mortgages
There are technically no specific restrictions regarding how many commercial mortgages you can have. Taking out a commercial mortgage follows the same basic principles as a residential mortgage, though usually with significantly higher deposit requirements. The lender will carefully consider your intentions for the property and the extent to which your proposed investment represents a risk.
Depending on your intentions for the property, your lender may request evidence of your experience/expertise in the business area in question. This can raise additional challenges for investors branching out into something new, though needn’t necessarily count you out of the running.
Commercial mortgages in general can be trickier to apply for than residential mortgages, calling for independent expert support throughout the process. Whether you are planning ahead or in need of urgent support with a time-critical issue, we’re standing by to take your call. Work out the costs of a mortgage using our UK mortgage calculator