loan exceeds limit, cant get a second mortgage

Hi,
Let me explain my situation. We owe the bank about $350.000 on my primary home. we want to invest in a second house and the bank won't allow us to get any more loan, so we had to pay in cash. Now that we bought that second home and put it up for rent. Everything goes well, so we think investing in home right now is a good idea (economy...). Now we want to buy another (third) one, but now we don't have any money (we used all our money to buy the second home). Do you know any private companies where we can get a mortgage to buy this third house? The rate might be higher (5.0% to 10.0%) and that's ok.

Thank you.

There are companies that can help with finance a 3rd home, but the adjustments that you will have will easily put you into a 6.5% rate and above. Also, you will need 20% down since this is an investment. Lastly, your expense ratios are more than likely very high - if you are out of these ratios, you most likely will be denied for financing.

While it may be a good time to invest in real estate, if you don't have any reserve funds, it would be very risky.  If any unexpected large expenses come up, you might not be able to recover and then end up losing one or more of the properties.  You never know when a major appliance, furnace, airconditioner, or something else may break down and need to be replaced.

I agree with Kent

But if you are really desperate to buy this 3rd home and you own this 2nd home free and clear then why not just get a HELOC on the 2nd home to pull the equity out for a down payment?

He called it a second home, but also said he rents it.  It will be hard to get a HELOC on a rental these days.

I would suggest refinancing the investment property.  If you have owned the property for 6 months, you can do a cash out refinance to 70% of the value of the home.  That way you would have reserves to purchase the third home.  Keep in mind that you cannot use rental income as income to offset the payment if you don't have a past history of being a landlord.  So, if you had rental property in 2008, you would be able to use rental income and also future rent on the new property to qualify.