Blanket Mortgage: A Dream Package

A blanket mortgage is a blessing for large land owners who need cash to begin developing the land and reaping equity.

(PRWEB) December 28, 2004 -- Mortgage terms are many and proper understanding of each would help the borrower get more and better deals. Here we attempt to make clear one of such terms- Blanket Mortgage.

How about mortgaging a property which is yet to be built? Does it seem absurd? Then, think again.

Blanket Mortgage is a type of mortgage formulated to borrow money against more than one asset at the same time.

This collateral could be:

•    More than one asset as separate entities

•    A whole property divided into lots

•    A large tract of land yet to be developed into a co-operative

It becomes more convenient rather than taking out mortgages for each property individually and paying for each separately.

It was initiated as a security device for commercial property but today it is applicable for residential areas as well. The loan obtained is used to cover the costs of developing the property .the development costs include, construction costs, architectural, acquisition, etc. For more on blanket insurance log onto http://www.mortgagefit.com/blanket-mortgage.html

The benefits of taking up a blanket mortgage are many.

•    More Convenient: rather than working at separate mortgage for the property separately, they can be clubbed together under one mortgage.

•    Helps finance the future: If you have a huge tract of land but are running out of cash to develop it into an asset, the place could be used to develop the land, plan and construct.

•    Gives you time: you have the money in hand and so allow you the flexibility to begin work when prices are lower.

•    Helps you sell house: There is no restriction on selling the individual lots before the deadline as this would help you in repayments.

E.g. if you take a mortgage of a tract of land of 10 lots for $2,000,000 and then sell each lot at $500,000, you will get $5,000,000 that means, $3,000,000 extra. This could help in repayments.

The advantage of a blanket lien for co-operative developers is maximum. Each resident family need not qualify individually for the mortgage. They only need to contribute monthly to the repayment. As the mortgage is in bulk, the individual costs are reduced considerably.

Since the owner of the land is a single individual, different mortgage would have legal complexities. Moreover in time of default, the possibility of a clash over priority of single mortgage does not arise.

The partial release clause in blanket lien is an added plus. If you want to release a single lot, you can repay a specific portion of the debt. But, this clause needs to be asked for from the lender. Some lenders may even charge fee for including this clause at closing.

Blanket lien is applicable to present and future properties, especially catering to land developers and real estate investors. So, a blanket mortgage is a bundled package but the borrower can unbundle at will.

Now you are free to convert your dreams to reality.

For more information you are welcome to

http://www.mortgagefit.com

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