Getting multiple mortgages to grow a real estate investment portfolio

Getting multiple mortgages can be a great way to grow a real estate investment portfolio. Getting approved for more than one mortgage requires careful planning and diligence, however, as the process is often much more complex than applying for just one loan. Here are some tips to help you successfully get multiple mortgages:

1. Have Sufficient Income 

Lenders want to see that you have enough income to comfortably repay all your loans without getting into financial difficulty. It's important to ensure that you make enough money each month to cover mortgage payments on all the properties you're investing in.

Using Future Rental Income

You can use up to 50% of your future rental income to help you qualify for the mortgage. Experienced lenders will be able to factor in rental opportunities for your mortgage payments if you work with the right type of lender.

2. Aim for Good a Credit Score

Your credit score plays an important role in whether or not you get approved for multiple mortgages. It's important to make sure your credit score is above average before applying for a loan so that lenders feel comfortable lending you money.

Getting a mortgage with a low credit score

We often say "Everyone can get a mortgage" but there will be differences in the terms of those mortgages.  If your credit score is below 700 your options for lenders will be more limited but not impossible.

3. Research Different Lenders

Different lenders have different criteria when it comes to approving applicants for multiple loans, so it's important to research these requirements carefully before applying for a mortgage. Make sure you understand all of the lender's terms and conditions and what they need from you as an applicant.

A, B, C, D Lenders

There are multiple levels of lenders in Canada, often they are referred to as A, B, C, and D. Level A, would be your major banks; RBC, TD, Scotia, National CIBC, etc. After the A banks come trust companies, also known as B lenders. There is C level, which is credit unions. Lastly, there are private lending or mortgage investment corporations.

When it comes to getting mortgages, Level A banks generally like people who are buying their first home. This is a textbook transaction and generally not complicated. When it comes to real estate investing,  some of those lenders are capable, and some are not. This is where research is needed. If you are initially rejected by a major bank, it doesn't mean that you won't qualify, you will need to do more research, contact more lender options and more than likely need to work with an experienced mortgage broker.

4. Gather Financial Documents 

When applying for multiple mortgages, you'll likely need to provide additional documentation such as tax returns, bank statements, proof of employment, etc., so make sure you have all of this information ready when submitting your application.  Have patience while documents are being requested. If you are being asked for documents repeatedly it's a good sign because if documents are being requested, that means the bank is continuing to work on the file and the probability of the approval is increasing because when a bank doesn't want to do the deal, they just decline it and there are no documents to request. If you haven't heard from your broker in weeks and your closing is coming up, that's probably a bad sign because they either haven't done their part or the bank had turned it down a while ago and you don't know. So asking for documents is a good thing.

5. Consider Using a Mortgage Broker

A knowledgeable and experienced mortgage broker can help guide you through the entire process of getting multiple mortgages, ensuring that your applications are successful and that you get the best deals available. They can also provide advice on how to maximize your chances of approval and walk you through the paperwork required for each loan.

 When you go to a broker, it's the equivalent of you knocking on every bank's door with your application. An experienced broker will be able to send the application to the lender, where it should get approved. It's not throwing darts at a wall, sending it to 15 different banks and hoping someone agrees. It's knowing the policy, knowing the product, knowing the location that some banks like to lend in versus others, and then giving it its best opportunity.

Watch our webinar; How to Get Mortgages with Mortgage Broker Amit Puri and Investor, Alex Wilson for more insights on how Mortgage Brokers can help you get mortgages.

Following these tips should help ensure that you have the best chance of success when applying for multiple mortgages. However, it's important to remember that every lender has different criteria when approving applicants, so make sure you do your research before deciding which one is right for you. With this in mind, don't forget to take into account any other costs associated with owning multiple properties such as taxes