What is a Blanket Mortgage?

Do I really need a blanket mortgage? This can be a somewhat complex question to answer. The proper answer will often hinge on why the borrower is seeking the loan. Personal financial situations can play a factor in ascertaining whether or not a blanket mortgage would be a good move. Therefore, it is important to look at the benefits that a blanket mortgage provides.

When you acquire a blanket mortgage from a portfolio lender, you are doing so to acquire several properties under one loan as opposed to taking out several loans. This has a number of advantages. One of the most helpful advantages centers on only having to make one monthly mortgage payment. This can make one’s finances easier to handle than having to deal with multiple payments with varying due dates throughout the month. Additionally, the single payment may be less than the combined cost of three separate mortgage payments. This will allow the borrower to maintain increased liquidity since his capital is not going towards a multitude of payments.

Then, there are other cost saving aspects associated with a portfolio lender provided blanket mortgage. While we often do not think of it, there are costs associated with taking out a mortgage. Closings cost money, attorneys come with fees, travel possesses a number of expenses, and administrative duties have their costs as well. Anyone taking out four separate mortgages would have to endure these costs fourfold. Obviously, that could be a huge drain on the borrower’s finances. A blanket mortgage, however, reduces these costs dramatically. Again, this is because one mortgage is being executed as opposed to several.

And, while it is somewhat of a clichéd saying, the words “time is money” is also a very accurate statement as well. When you are investing time procuring a mortgage, you can not apply you time to other pursuits. So, if you must acquire four mortgages you will see a fourfold drain on your time resources. With a blanket mortgage, the time commitment will be reduced to handling a single loan. This is no minor benefit since there are many other opportunities out there. Tying up your time with several mortgage applications is not a wise allocation of your availability.

Once again, there are a number of benefits to a portfolio lender provided blanket mortgage. These benefits greatly exceed the hassles associated with multiple mortgages. So, if you are in the market to purchase many properties, a blanket mortgage would be the far better borrowing option.

by Susan Lassiter-Lyons - December 21, 2009

Back to Top

###

Source: http://www.portfolioloanblueprint.com