refinance

How to refinance a house you're renting out

Banks limit multiple mortgages
Rental income doesn't necessarily count © Ryan R Fox/Shutterstock.com

Other restrictions apply when you want to refinance a house you're renting out. For instance, most lenders won't allow one borrower to have more than four mortgages on residential properties, according to LaDue. That limit, he explains, exists in part to prevent the misuse of government-insured loans to acquire multiple homes as investment properties.

"The purpose of having the ability to make minimum down payments and get (Federal Housing Administration) or private mortgage insurance was not to make (investors) rich in housing, but to provide access to the housing industry," he says. "You can have 10 houses and if only three of them have mortgages, you can get one more mortgage on a nonowner-occupied property, but you can only have four mortgaged premises."

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