You would be surprised to find out how many people use private blanket loans which are commonly referred to as blanket mortgages to finance the purchase of their multiple properties. Blanket mortgages are lauded for their ability to provide potential buyers with the financial resources to cover the costs associated with purchasing or developing land. If you are not certain about how having this type of mortgage can be beneficial to a homeowner, this article aims to shed some light on what the advantages of private blanket loans are.
Save on Closing Costs
Taking the option to refinance your loans to just a single blanket mortgage saves on closing costs and your monthly repayments. Instead of paying separate interest rates, you can compound your rates for one mortgage.
Makes Expanding Your Portfolio Easier
As a landlord, you are probably aware of how you can only maintain a limited number of mortgages at the same time. Most landlords choose to set up separate limited liability companies for each home loan as a viable option for expanding their portfolio. Having a blanket loan negates the need for setting up these separate companies because it provides you with the option to own many properties with a fewer number of loans.
Makes it Easier to Sell Your Property
One of the most significant characteristics that make a blanket loan an appealing loan option is the release clause which allows you to sell your rental property that is covered by the loan without having to repay the entire mortgage first. Instead, your lender will require you to reduce the amount of your loan to ensure that the ratio remains at or below a specific level.
Other benefits of taking out a blanket loan include filing fewer statements which means that you meet fewer obligations and deal with less paperwork.