When to Use a Blanket Mortgage

Blanket mortgages make a lot of sense for today’s rental property investors. Many income investors have poured much of their liquidity into making acquisitions, and own property free and clear, but could use the additional flexibility of more cash on hand.

Those with 5 plus rental properties can use blanket mortgages to refinance, and access captive equity for making property improvements, covering holding costs, or simply taking advantage of low-interest rates and leverage while recouping precious cash stores.

Others will want to use these investment property loans for making acquisitions while asset prices are attractive. Some of these buy-to-rent loans will allow for bulk buying of single-family homes, or offer a credit facility for pooling property from different sources.

Whatever, the purpose, this is an ideal time to use blanket mortgages for residential property investors.

7 factors to look for when considering a blanket mortgage loan include:

1. A lender experienced in making blanket mortgage loans
2. An investor-friendly lender who actively wants to fund single-family homes
3. Non-recourse loans if at all possible
4. Corporate or business entity loans and title holding for privacy and reduced liability
5. If there are pre-payment penalties, and how much they are
6. Longer amortization schedules for lower payments and more flexibility and cash flow
7. Clarity on partial releases for selling individual units in the future