Blanket Loan / Mortgage

A blanket loan / mortgage can help you simplify real estate investing by combining all your real estate ventures into one simple agreement. Learn more about blanket loans / mortgages and find out how you can use these unique loans to your advantage as an investor.

A blanket loan / mortgage is a type of loan that’s designed to cover multiple properties within a single loan. Let’s say you’re a real estate investor and you’re investing in multiple properties. With a blanket loan / mortgage, you can combine all of those properties into a single loan agreement to make your life easier.

Normally, you’d have to sign a separate loan agreement for every property you’re purchasing. As a result, you have to make monthly payments to different lenders and it can be tough to stay on top of that. A blanket loan / mortgage offers an alternative to multiple traditional loans.

A blanket loan / mortgage relates to hard money loans because you can apply for a hard money blanket loan. If you have debt spread out across several different properties, a hard money blanket loan is an effective way to consolidate your debt into a single monthly payment. You can make a monthly payment to one lender each month without worrying about missing a payment on one of your investment properties.

If this is the first you’re hearing of blanket loans / mortgages, the whole thing may sound a little confusing. Let’s take a closer look at how blanket loans and blanket mortgages work.

It’s not uncommon for real estate investors to invest in several properties at once — especially as portfolios grow. In some cases, a real estate investor may secure separate mortgages or hard money loans before considering a blanket mortgage. If that’s the case, those existing loans can be combined into a blanket loan or mortgage with one lender.

Looking at some examples of blanket loans and mortgages can help you get a better understanding of how these loans work and how they can benefit you. In this section, we’ll look at how blanket loans can be used to combine existing loans as well as new loans.

Some investors don’t consider blanket loans before beginning their investing journey, which can result in multiple individual loans. Let’s say a real estate investor has purchased three properties that they’re still paying off. Making three monthly payments to separate lenders can be a hassle, so this investor decides to apply for a blanket loan to combine these loans.

As long as the lender approves the application, each existing loan will be combined into a single blanket loan. The investor will only have to make a single monthly payment, and they can get a quick overview of their combined loans in one app.

If you’re reading this before beginning your investing journey, you might want to apply for a blanket loan before you start investing. Even if you don’t have any existing loans, you can apply for a blanket loan to combine multiple property purchases into a single loan. You won’t have to worry about a complicated application process or making multiple payments — your loans will be combined into a single blanket loan from day one.

Depending on the lender you choose, you may be able to add additional loans to your blanket loan as you purchase more properties or sell individual properties while maintaining your loan. However, that’s something you should ask your lender about before you apply for a loan.

Before you apply for a blanket loan, make sure you know what you’re committing to. Here are some pros and cons to consider before choosing a blanket loan / mortgage.

Simplicity is perhaps the biggest benefit of blanket loans. You can manage all your individual loans in one place, and you only have to make one monthly payment.

Blanket loans can also save you money because there are often costs associated with having multiple loans. Plus, you may have the flexibility to sell individual properties while retaining your loan.

If your blanket loan doesn’t include a release clause, you can’t sell individual properties and maintain your loan. Blanket loans also use the individual properties you purchase as collective collateral, so they can be high-risk loans if you default on your debt.