If you are a real estate investor, then you have probably heard of blanket loans. It is a type of mortgage used to provide finance for multiple properties. It has quite a number if benefits thus, it becomes worth considering. If you are still in doubt, then the following are some of the top compelling benefits that a blanket loan has in store for you.
One of the major benefits of blanket loan is that there is less paper work involved in the process. it gives you an opportunity to apply for more than one mortgages just with a single credit approval. In other cases, it would mean that you present several credit approvals for certification. A blanket loan only requires you to submit credit, asset verification or even employment verification once for all the mortgages. Again, rather than making several mortgage payments in a month, you will only need to make one or two on the maximum. This saves a lot of time and effort in the long run. You will also save yourself from having to respond to several queries every month. The second reason why a blanket loan is the ideal option is that you will be able to save on closing expenses and even refinancing. When refinancing from several loans to only a single blanket mortgage, you could as well manage to save a lot on your monthly payments. This would definitely lead to an increase in your cash flow. However, it would depend on the available rates and your current interests.
Next, a blanket loan leaves some room for expansion. For instance, if you’re a real estate investor with many properties, you are probably aware of the common challenges that other investors face when they are re looking to expand their investments. In most scenarios, you are only allowed to maintain a specific number of mortgagees at once. This becomes a major obstacle especially when you now need to expand your investment and rent a more properties. This is where a blanket loan comes in handy. It will give you an opportunity to own multiple properties with a smaller number of loans. Another reason that makes a blanket loan more appealing to many real estate investors is the release clause factor. It gives you an opportunity to sell any of your properties covered by the loan without having to pay off the whole amount . Rather than paying the whole mortgage, you will only have to reduce the amount. The LTV ratio will thereby not change or slightly reduce.
There are several benefits that come with acquiring a blanket loan. If you’re looking to mortgage your real estate properties in a way that will save you money in the long run, then you are in the right place. A blanket loan will leave room for expansion of your portfolio, which is one of the major obstacles that investors face. Since they are asset-based, the application process becomes even easier compared to other traditional loans. It is therefore the best deal for your investment future.