Blanket Mortgage

In real estate, a blanket mortgage is a type of loan that covers multiple properties or parcels of land under a single mortgage agreement. Instead of securing separate mortgages for each individual property, a blanket mortgage allows a borrower to finance several properties together as one cohesive investment.

This type of mortgage is commonly used by real estate investors or developers who own multiple properties within a specific area or portfolio. By consolidating the financing for multiple properties into a single loan, borrowers can often benefit from lower interest rates, reduced paperwork, and simplified management of their real estate holdings.

One key feature of a blanket mortgage is that it typically includes a release clause, which allows the borrower to sell individual properties from the blanket mortgage as needed, while still maintaining the overall mortgage on the remaining properties. This provides flexibility for investors to divest certain properties without having to refinance the entire mortgage.

However, it’s important to note that blanket mortgages may also carry certain risks, such as cross-collateralization, where the lender has a claim on all properties included in the mortgage if there is a default on the loan. Therefore, borrowers should carefully consider the terms and conditions of blanket mortgages and consult with financial advisors or real estate professionals to determine if this financing option is suitable for their investment strategy.