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What Is A "Blanket" Mortgage?
Question: What is a "blanket" mortgage?
Answer: A "blanket" mortgage is one loan secured by several properties. Suppose you have three pieces of property. They have been used to secure one loan. The time comes when you receive a very attractive offer on one property. You want to sell. But, if you sell, you will either need a release from the lender or you will have to re-finance the remaining two properties because the sale of one property means the lender has less security for the blanket loan. For reasons of flexibility, most property owners are likely to be better off with multiple loans rather than a single blanket mortgage. The advantage is that you have one payment and one closing. The disadvantage is that if something goes wrong, you cannot sell off one property without disrupting the financing on several.
Written by Peter G. Miller.
© 1997 Peter G. Miller. All Rights Reserved. Rules, Disclaimers & Notices.
Copyright © 2012 Realty Times. All Rights Reserved.
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