I am planning on getting financing in my own name to buy properties. I have a 720 credit score and am wondering approximately how many 200k houses can I get financing on before they tell me that they can not give me any more loans? Or can i just show them that these properties I own all have solid, paying renters and that frees up my debt to asset ratio and allows them to lend me more money to buy more houses? Any insight on this topic will be really helpful. I don’t want to get rolling and then see my funding source dry up. Thanks alot!
As long as you maintain credit worthiness there are lenders out there who will loan money to you until you reach the loan exposure limits. Some lenders it is a dollar amount such as 2M in loans while at other lenders it may be number of loans; such as they will extend credit for 19 loans. It all depends on the lender what they will allow. BTW this is the short answer. There are many more things that go into the approval such as reserves, job history, etc… Locate a good broker who has experience with investment loans and you should be in good hands.
Some of the major factors that go into qualifying are:
credit score
of tradelines open and active
employment history
income
assets
down payment %
With your score you may be able to get 100% financing.
This may not be the best idea though if you plan to rent the properties and need good cash flow. That is unless you are buying way below market value and have strong rents.
Like Christopher said, there are plenty of lenders that allow for unlimited properties. You may have to mix and match a few but a mortgage consultant that specializes in investment loans like these would be able to help you plan.
While each loan will stand on it’s own merits each lender will have a limit on the credit they will extend to any one borrower. This is known in the trade as “loans to one borrower limitation”. It is governed by regulatory law as well as each bank’s internal policy. It is usually some percent of the bank’s capital base or outstanding loan portfolio. If you are an individual borrower buying $200k rental houses it will take you a while to hit your local bank’s LTOB limit. If and when you do just go to the next bank.