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Tuesday, 09 November 2021 07:12

What Is A Blanket Mortgage And Why Use Blanket Loans?

What is a Blanket Loan?

blanket loanFor a real estate investor with multiple properties, a blanket mortgage covers all of them under one loan, it is a cost-effective and time-efficient way to reduce the stress of managing multiple loans. This is the "cliff-notes" version for learning about blanket loans. For those who are wanting to dig into details we wrote an extensive article on "All About Blanket Loans".

Investment real estate rental mortgages can be complicated, each new mortgage creates more work. Without a blanket loan, the more you keep adding to your portfolio, you are adding new mortgages for each one; creating a nightmare of paperwork, payments, & accounting challenges. 

Simplifying Investment Portfolios

With all the concerns of owning investment property for the real estate investor, like closing costs, the release clause, keeping up with multiple properties but under an individual properties loan, keeping up with all those pieces of real estate under a traditional mortgage with balloon payments and interest rates of a single mortgage for each of the rental properties; makes one wonder how real estate developers or property owner can keep up with any of the home loans at all.

With all the paperwork and multiple monthly payments to mortgage lenders, the home loans have drawn in house flippers instead of long time investors. Then people find out about types of loans called blanket mortgage loans. So let's learn more all about blanket loans.

All About Blanket Loans

A blanket mortgage solves the confusion of multiple loans by placing all properties under one loan with one monthly payment. This is completely simplifying the investment portfolio management process.

With a long-term loan, real estate may be sold without initiating a “sale case”, allowing you to use the proceeds of the sale to buy multiple properties. With Rental Home Financing, you can use a blanket loan for purchase or refinance. For example, if you buy a portfolio of a dozen rental properties, a blanket loan allows you to get a mortgage that covers all ten of them under one mortgage. Simple!

Companies with multiple offices can use a blanket mortgage as a commercial loan since it allows them to acquire multiple buildings at the same time. 

Why Should You Be Using Blanket Loans?

You could own a dozen rental properties and only need to worry about one mortgage. The regular loans through Fannie Mae and Freddie Mac allow you to purchase up to 10 rental properties at a time, one loan at a time. Blanket loans rids the complexity of managing multiple loans. 

Investors often use these loans to finance new multiple investment rental properties, and even apartment buildings, or combine existing investment loans into one easy mortgage. The latest hot investor boom trend is the loans for short term vacation rentals for use with Airbnb. Some will even buy a large piece of land to split and build out separately as multiple streams of this hot new income.  Want to know more? Contact us now!

How Does a Blanket Loan Work? 

In a conventional loan, they evaluate your financial profile from personal income and tax records to qualify you for a loan. This type of loan doesn't make sense for every borrower and the last thing you want is a mortgage you can't pay off. Considering this, we at take a completely different approach that is easy to qualify for. We provide investment mortgages based on property potential income, your personal income tax won't hold you back. You get one simple mortgage to manage all your investment properties.

There are many benefits of blanket mortgages, including cost savings over individual traditional mortgages, giving investors more funding than they would otherwise have. Blanket loan investment financing can be used for different parcels of land at various stages of the building of investment properties, or it can be as simple as a mortgage on two properties for rent. Bundling the mortgages of multiple properties simplifies finance for investors. To learn more, call us today to have an agent contact you. 888-375-7977

Advantages of a Blanket Loan:

Instead of a track of 20 mortgage and loan payments, simply one or two are needed - as your real estate portfolio grows, it can become difficult to manage separate mortgages for each property. The more real estate deals you finance under single loans, the more complicated it gets - it's that simple.

Faster portfolio growth is now available since there is often no limit to the number of properties an investor can own with a blanket loan. Investors can wield the larger credit power they receive from these larger loans to acquire additional inventory, negotiate better loans terms or simply lower monthly payments.

If you are looking to expand your portfolio with, buy to rent investments, build to rent, or even looking at commercial property; Rental Home Financing funding can help.


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About Rental Home Financing:

Rental Home Financing, as the best mortgage lenders we originate rental home loan products and cash out refinance investment property loans as the best investment property refinance lenders. Commercial blanket loans are available with a commercial purpose to suit your needs.

Also, as DSCR loan specialists, we are currently authorized to make such loans in most all areas of the United States. Specific circumstances will determine whether we have the ability approve/close portfolio rental home loans in your state(s). When you are ready to get a mortgage for rental property, we are ready to serve you.

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