What is a blanket mortgage?

A blanket mortgage is specifically designed to secure multiple properties under a single mortgage agreement. This type of financing is commonly utilized by developers or real estate investors who own several properties and wish to consolidate their financing into one single loan.

The primary advantage of a blanket mortgage is that it streamlines the financing process, allowing for easier management of payments and potentially better terms because it reduces the administrative overhead associated with multiple individual mortgages. Additionally, this form of collateral can facilitate the sale of individual properties while keeping the overall mortgage intact; partial releases can apply to specific properties without needing to refinance the entire mortgage.

In contrast, a mortgage secured by a single piece of property focuses solely on that one asset, which does not offer the benefits of managing multiple properties as a whole. A mortgage with no interest is outside the typical scope of traditional financing and does not relate to the structure of collateral or risk associated with a blanket mortgage. Lastly, a conventional mortgage with additional borrowing options does not specifically pertain to the concept of securing multiple properties under one loan, as it commonly refers to a standard mortgage with more flexible terms or line-of-credit features. Thus, the definition and function of a blanket mortgage align best with the idea of securing multiple properties as collateral.