Blanket Loans are a type of loan typically used to finance more than one piece of property. They can be used to finance construction, purchases or cash-out refinances. The main feature of Blanket Loans is that they cover more than one piece of real estate. They can also be referred to as Cross-Collateralization Loans.
Real estate developers often choose Blanket Loans to purchase large plots of land that they can then divide up into multiple smaller parcels, develop and sell off individually. Instead of having to obtain a new mortgage or refinance the existing mortgage whenever a piece of the development sells, real estate developers can use a Blanket Loan to purchase a large development and then release a part of the mortgage as smaller parcels are sold, while the remaining mortgage remains intact.
Builders tend to use Blanket Loans to build multiple homes in a single neighborhood. As each home sells, the proportionate part of the mortgage that was used to build that home is repaid to the lender. The balance is adjusted accordingly and continues one phase at a time until every home has been sold off and the balance is repaid in full.
Flippers and Investors acquiring new properties can use Blanket Loans to finance part or all of the cost of a new property purchase. This strategy allows an investor to access available equity in his or her existing portfolio and use that equity to make the down payment and pay closing costs on the new property. Investors can use Blanket Loans to purchase a new piece of real estate without having to sell another property or use their cash.
Investors often use Blanket Loans to refinance individual property loans and consolidate them together into one loan, using the equity in their real estate portfolio to obtain cash for additional investing, to perform any needed repairs or other purposes.
With a Blanket Loan, you can use the total value of your real estate portfolio as collateral for the loan. Blanket loans help you to purchase or take a cash-out refinance of the combined equity from multiple properties into one simple “blanket” loan. You can use those funds to help grow and expand your business.
While a traditional mortgage comes with a due-on-sale clause, that isn’t the case with Blanket Loans. Due-on-sale clauses mean that the outstanding mortgage must be paid in full right away when the property sells. A Blanket Loan comes with a release clause that allows you to sell off part of the collateral and repay only the proportionate part of the loan. This feature helps to facilitate sales and purchases of several properties without having to obtain multiple mortgages.
To help you determine if a Blanket Loan is right for you, please contact one of our licensed Loan Specialists by calling us directly at 844-574-LOAN (5626), by submitting the form on the right or by completing an application directly on our website.
"We are so glad to have called and trusted Westpark Loans with our home buying process. Special appreciation to Westpark Loans team and Hats up to Anthony Carroll. The best team I could possible ask. We understand the process could be really drowning emotionally, but Anthony pretty much holding our hands in the whole process. Always, always (always) replied to our questions, concerns by phone, email or text within seconds (minutes) if he doesn't have the answer he will get you the answer in timely manner. Updates us in the second he heard something. And their agents Scott and Daniel Woo are also the best! Daniel has been giving us a great guidance, advice on what we actually looking for. They have an outstanding knowledge, expertise and most importantly honesty. More driven to help and guide me than making a few $. Highly recommended. For sure if I ever need to purchase another property, Anthony and Dan would be the first person I will call."