Businesses often consider private blanket loans to but commercial property investments. The main aspect of the blanket loans is the lack of the clause ‘due on sale.’ This shows that the loan survives the sale of one or more properties by which it is secured. The type of loan can be used by:
- Residential landlords
- Commercial landlords
- Construction companies
- Property developers
Favorable terms on loans
The ‘partial release’ clause is a key feature in the private blankets loan. The loan is very useful for real estate investors and property developers. For property development, you should opt for a blanket loan to purchase land tracts and construct homes on them. As you sell the property, you can pay back the bit of loan that funded the unit sold at the particular time. As a result, you do not have to refinance the entire blanket loan every time you sell a portion of the real estate.
Application of private blanket loans permits you to apply for several loans under one approval. This means you are not required to submit employment, credit, and assess verification several times. Also, instead of making multiple loan payments monthly, you reduce them to one or two.
Saves on closing charges
Closing costs are high when refinancing or servicing multiple loans. Doing this under one blanket loan offers monthly savings on the installments, hence increasing your cash flow.
Easy to expand your portfolio
Most real estate investors and property developers are allowed to have many single loans at one time. This can be a barrier to expansion and more investments. Blanket loans, however, allow you as a landlord to own multiple homes with fewer loans.
To first-time investors or repeat buyers, it is a daunting process to figure out the best option for your project funding in some cases. Private blanket loans are types of loans that finance more than one property at the same period.