You already own a house or apartment and are looking to buy another one as an investment. Can you apply for a second mortgage loan? Keep reading this article and find out the answer to this important question.
The bank is not interested in the purpose of your purchase on credit. In fact, the only thing that is important to you is the conditions in which you find yourself when applying for the loan, which is why it is possible to apply for a second mortgage.
So, if you already own a property and want to buy another, you have the option of taking out two mortgage loans.
Considerations Before Applying for Your Second Mortgage Loan
The bank, when it finds out if you can have two mortgage loans, will perform a risk analysis, just like the first time you applied for a loan. If you are paying off a mortgage on a first property, it is more feasible to obtain a second mortgage loan through the same bank or entity with which you are dealing, as long as you meet your credit obligations.
The situation changes if you are about to finish your first loan or if you have already paid it off, because this house will provide you with a capital guarantee. In this case, if you add a good amount to the purchase, you will be able to access a second property without any problems and much more easily. Likewise, you will have the freedom to quote a mortgage loan with all banks or financial institutions to choose the most convenient one, without being tied to a specific entity.
Who should have two mortgages?
Currently, the best people to buy with a mortgage loan are real estate investors. The advantage lies in the profitability and capital gain that comes from using the second home as an investment. This can be distinguished from purely holiday use, where the benefit is the use and not the increase in equity, even when this actually increases.
This is so true that many professionals or economically established families with high incomes start out as real estate investors with excellent results. Many of them seek personalized advice and seek a quote for a mortgage loan that meets their needs and, from there, invest in an asset that generates income in the medium term.
What are the banks asking for?
The requirements of financial institutions for granting a second mortgage loan are practically the same as for the first home, or first loan:
- Income stability;
- Periodicity;
- Credibility.
Keep in mind that they will assess your situation more carefully and may reject credit if your current business records do not indicate job stability or if they find instability in your income.
In this sense, it will only be advisable to take out a second mortgage if you can demonstrate that you are capable of responsibly fulfilling the obligations that this entails. In this case, you should have no problems applying for a second loan.