Tuesday, 14 July 2020 08:00

How to Choose Blanket Loan Lenders for Investment Property

How to Choose Blanket Loan Lenders for Investment PropertyInvesting in multiple properties is a practical investment strategy, but if you don’t have the cash, you might be wondering how you can take advantage of this financial tool. Blanket loans are one solution to purchasing multiple properties.

Finding solutions for this type of investment can be challenging. Blanket loan lenders can be hard to find, but there are ways you can improve your chances of finding the best financing offers. Review this guide to choosing the right blanket loan lender for your investment property.

 

How You Can Find Blanket Loan Lenders for Investment Property

Blanket loan lenders aren’t necessarily traditional lenders. That is, they aren’t banks, but they are financial institutions that might specialize in commercial loans or financing new home construction. This means you’ll need to do a little research to find the right investment property financing for your situation.

You can find a solid list of reputable blanket loan lenders by following these three steps:

  • Research available options: Starting with your bank is a good choice, but it’s hard to find blanket loans from most banks. That means you’ll need to search for blanket loan lenders. You can look for local lenders or you can search for lenders that can work with you online.

  • Compare costs and features: Before you apply for blanket loans, you should put together a quick chart of the potential loan costs. Include the APR or interest rates, length of the loan, and any other fees or costs for taking out the loan, such as documentation fees or prepayment penalties.

  • Apply for the best loans: Review your chart of blanket loan lenders and apply for the ones that offer you the most value. You want to have a few approved offers to compare before you make your decision. This will ensure you are getting the best rates.

Blanket mortgages can be a critical investment tool for property investors who want to expand their portfolios, but if you aren’t sure if they’re right for you, there are a few things to consider.

3 Things You Need to Know About Blanket Loan Lenders

As with all loans, there are costs associated with blanket mortgages. That means you need to be strategic when you apply with blanket loan lenders.

1. Blanket loan lenders save time and resources.

When you want to invest in multiple properties, it can be difficult to secure financing. With conventional mortgages, you will have to fill out applications for each investment property and deal with the entire application process for each one individually.

Blanket mortgages make it simple for you to finance multiple properties at one time. You can fill out a single application and sign documents one time. You’ll still have to handle appraisals, title searches, and any insurance costs for each property, but there are efficient ways to do that, too.

2. Blanket loan lenders offer accounting efficiency.

If you choose to go through the process of securing multiple loans for every rental property you want to finance, you’ll have more to manage every month. You have to manage each loan payment individually, as well as record taxes for each of these loans.

Blanket loans give you a single payment to cover every investment property. This means you only have one payment to record on your books each month and you only have to manage taxes for that one payment. This can save an enormous amount of time, plus make accounting less complex.

3. Blanket loan lenders might provide future investment.

When you pay down the balance on a blanket loan, typically this gives you some equity in your property. If you manage your payments well and maintain the property, you might be able to leverage this equity for investment property financing in the future.

Another potential option is to refinance your blanket mortgage. Depending on the financial market when you refinance, you might secure lower interest rates or reduce your monthly payment, which can improve your cash flow.

Tips on How to Choose the Right Blanket Loan Lenders

Once you’ve figured out that blanket loans are right for you and you’ve got a list of qualified offers, you’ll need to make the final pass over your list. Choosing the right blanket loan lender is critical to boost your investment income.

Making your decision takes time, but it’s worth the diligence. These tips will guide you through the process to make it a little bit easier to narrow down the right choice:

  • Forecast potential income: This is critical regardless of the type of loan you’re applying for. Research rental rates for property in your area, and forecast both your potential income and any other expenses. You may have to see what your cash flow looks like.

  • Calculate anticipated loan costs: For each loan offer, you should calculate the sum of all of your payments, the cost of any documentation or processing fees, as well as any other fees or expenses directly associated with the loan.

  • Compare features and benefits: Another aspect of blanket loan lenders that you should consider is features like auto payments and other customer service benefits. The easier the lender makes it for you to manage your loan, the less time you have to spend on it.

This may seem like a lot of work at first glance, but it’s well worth the effort to know if your investment property financing is going to cost you money or boost your rental income.

Why You Need the Best Blanket Loan Lenders

It can be easy to fill out one application and accept the first offer you get, but comparing your loan options is an important part of putting together effective property investment strategies. The best blanket loan lenders have competitive rates that help you earn more each month.

The right blanket loan lenders will make it simple for you to apply and work with you to submit any documents the underwriter needs to approve you.

Looking for the best blanket loan lender for your property? Rental Home Financing can work with you to secure financing for your investment properties.

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