How Many Mortgages Can I Get W/o Killing My Scores?
I know that many factors will affect individual credit scores so I know that this answer can be different for many people but based on your own experiences or from what reliable sources you have heard; I want to how many mortgages can an individual have at the same time before it drops considerably? If you remember your specific case tells us how many loans in how much time and how many points did you drop? Thanks.
sounds like a question for www.creditboards.com
Interesting thanks for the info! I wondered the same thing, how many is too many.
after 10 properties open and reporting on one report, it eliminates many lenders. Doesnt make it difficult though. But if your used to going into the bank, you will need a LO. Should use an LO anyway, its cheaper in faster.
I have 32 credit accounts, some closed, the rest open. Only three of these are credit card accounts, the rest are mortgages or lines of credit. My credit score has not been affected at all by getting a new mortgage.
However, if you are just starting from scratch with no mortgages on your credit report, then getting the first one or two will drop your credit score somewhat until you develop a payment history for those accounts. In my case, I have so many accounts with a long payment history (a couple going back 24 years) that a new mortgage is just a blip on my credit report.
Paying down your credit cards and keeping your credit card balances below 30% of your credit limit will do more to raise your credit score than most anything else you can do.
If you have a reasonably good credit score and sufficient income, the easiest way to lower your ratio of credit balance to credit limit is to raise your credit limit. On my MasterCard, I had a credit limit of $12K with no balance. When I called the card issuer and asked for an increase, they raised my credit limit to $35K. My credit score jumped nearly 20 points the next time I checked my credit scores.
American Express doubled my credit limit just because I asked. Discover is a little more conservative and only gave me a 50% increase.
As long as your mortgages are current they will only help your score to go up over time.
If you are using your credit for mortgages, you will loose access to most (but not all) conventional lenders once you go over 10 properties on your report. A good mortgage broker will probably be needed to bypass this. At any given time there seems to be only 2 to 3 lenders giving loans to investors with more than 10 properties on their report. Right now I know of 3: Irwin, Suntrust, and 1st Magnus.
Time to get creative in your financing, pick from one of the few lenders that will do this type of loan, or go sub-prime (Consider it the cost of doing business and expect about a 1 point hit in the rate when going to sub-prime but with a good credit score). Kinda like commercial. The lender will say it is because of increased risk. My opinion is that the lender sees you are successful and they want a bigger piece of the pie. You pick which one of these reasons you feel makes the most sense...
JohnCl
The number of open mortgages does not affect your credit score. Think about it .... your credit score does not know your income so how can it know how much debt you could afford to pay? Now if you are late on your mortgage payments - that is a different story.
From my personal experiences
Debt to income ratio is important in getting a line of credit. If you have many rentals, then your debt to income is probably too high to get lines of credit unless you make a lot of money and you go stated.
Getting a new mortgage or refin is easier than getting a line of credit because they do not look at your rentals negatively (as the line of credit does) if they make money.
After 10 rentals you will have a hard time getting a new conventional mortgage.
also depends how many you take out at once. taking out 5 home loans short term will lower your score, getting one ever six month naw
Quote:At any given time there seems to be only 2 to 3 lenders giving loans to investors with more than 10 properties on their report. Right now I know of 3: Irwin, Suntrust, and 1st Magnus.JohnCl,
You can add Washington Mutual to your list. They will go to 20 loans or $2MM in total debt, whichever occurs first.
A Deed in Lieu has a very negative impact on credit scores/ratings. A DL basically states that the payer could not meet his/her obligations just as a foreclosure or collections.