A type of mortgage loan that enables borrowers to use numerous properties as collateral to secure a loan is known as a blanket mortgage. This can be particularly useful for real estate investors who own multiple properties and want to use them as leverage to access additional capital. The term ""blanket"" refers to the fact that the mortgage covers multiple properties, essentially "blanketing" them under a single loan.

With a blanket mortgage, the lender will use a single loan to secure multiple properties rather than requiring separate loans for each property. This can streamline the lending process and reduce the administrative burden for borrowers, as they only need to manage a single loan payment. Additionally, blanket mortgages can offer lower interest rates than multiple individual loans because they provide lenders with a larger pool of collateral and can reduce risk.

Blanket mortgages may be especially beneficial for real estate investors who are looking to purchase or refinance multiple properties at once. For example, an investor who owns ten rental properties may want to refinance them all under a single blanket mortgage to access lower interest rates and reduce administrative costs. Alternatively, an investor who wants to purchase multiple properties may use a blanket mortgage to finance the purchase of several properties at once rather than taking out separate loans for each one.

One potential disadvantage of a blanket mortgage is that all of the properties included in the mortgage are at risk if the borrower defaults on the loan. This means that if one property experiences financial difficulties or goes into foreclosure, all of the properties included in the blanket mortgage could be affected. Additionally, it can be more challenging to sell individual properties that are included in a blanket mortgage because the lender has a claim on all of the properties.

A blanket mortgage can be an attractive financing option for real estate investors who own multiple properties and want to use them as collateral to access additional capital. While there are some potential risks and drawbacks to consider, blanket mortgages can offer significant benefits regarding streamlined lending, lower interest rates, and reduced administrative costs.