How many mortgages can a person hold?

The federal government says that people in Texas and other places in the United States can have up to 10 mortgages. Furthermore, some types of property do not count against that total, including commercial real estate, apartment complexes with more than four units, time shares, vacant lots and manufactured homes on leasehold estates.

Why mortgage companies are reluctant to make multiple loans

Mortgage companies are often unwilling to make multiple loans because you pose a greater risk to them if something goes wrong. Usually, you will need more reserves if you want to take out multiple mortgages. Your reserves can include cash or checking accounts, stocks, investment vehicles like CDs and your vested life insurance policy.

Reserves needed for multiple mortgages

The more mortgages a person wants to take out, the more reserves they will need under real estate law. Individuals can have up to four mortgages and only have 2% in reserves. For mortgages five and six, they must have 4% in reserve, but for seven or more mortgages, they must have 6% in reserves. Some things do not count as reserves, such as the borrower’s primary residence, property that has sold or is pending sale and the property the borrower wants to take out a new mortgage on.

Factors considered by mortgage companies

In addition to the reserve amount, mortgage companies consider several other factors. For example, they look at the person’s credit score as it can indicate how well they manage money. They also consider how large a mortgage the borrower wants to take out compared to the property’s value.

Individuals with enough assets, a good credit score and a desire for a reasonable mortgage can take out 10 mortgages.