How to Combine Mortgages on Properties

Written by lynn lauren
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If a borrower owns multiple properties and has a large amount of equity in one of them--especially a primary residence--he can use that property to combine mortgages into one monthly payment. The key to this process is having enough equity, or "room" in the value of the home to combine the debts. Here is a step-by-step process of how to combine mortgages on properties.

Skill level:


  1. 1

    Fill out an application with a mortgage lender. List all mortgage debts held. Provide the lender with all required documentation. These items usually include two months' pay stubs, tax returns from the past two years, and bank statements from the past two months (all pages).

  2. 2

    Ask the lender about refinancing rates to roll several debts into one mortgage. You'll get your best rate if the debts can be refinanced on the borrower's primary residence. However, the borrower and lender will have to pick the property with the most equity to close the deal. To qualify for a conventional mortgage, the property financed must be a residential property in the borrower's name. However, commercial properties may be added to a residential property, if there is enough equity in the residential property.

  3. 3

    Compare three different mortgage lenders rates to determine the best mortgage. Compare APR (annual percentage rates) on each mortgage, not just the monthly rate. The APR calculates the total fees on the loan in one year plus the monthly interest rate. It is the most accurate comparison of mortgage rates.

Tips and warnings

  • If there is not one property with enough equity to cover all the debts, consider refinancing two of the properties or getting a commercial loan to cover all of the debts. The commercial loan will use all of the properties as collateral and will be subject to different terms and rates than a traditional mortgage.
  • Current Fannie Mae and Freddie Mac rules stipulate that a borrower can have no more than four mortgages at any one time. If the borrower currently has more mortgages than that, unless he is refinancing and consolidating to four or fewer total mortgages, he will not be able to get traditional mortgage financing.

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